During embryogenesis and wing disc morphogenesis in Drosophila, different developmental mechanisms are used along the antero-posterior (A-P) axis. The establishment of antero-posterior polarity requires the secreted protein Hedgehog, which is only expressed in P compartments and which is a key effector of the Engrailed transcription factor. At the same time, it is essential that both engrailed and hedgehog (hh) remain in a repressed state in A compartments. In this article, we show that hh is maintained in a repressed state by the Polycomb group (PcG) chromatin proteins. We show that this process takes place during embryogenesis through two genomic elements that display genetic properties of a PRE. Interestingly, hh expression is not regulated by PcG genes in salivary glands, although at the same developmental stage PcG proteins repress hh in the A compartment of the wing disc. In addition, no PcG binding sites were found on polytene chromosomes, neither within hh transgenic constructs nor at the hh endogenous locus. Together, these results suggest that hh repression by the PcG acts in a tissue-specific manner.