Chromatin insulators are thought to restrict the action of enhancers and silencers. The best‐known insulators in Drosophila require proteins such as Suppressor of Hairy wing (Su(Hw)) and Modifier of mdg4 (Mod(mdg4)) to be functional. The insulator‐related proteins apparently colocalize as nuclear speckles in immunostained cells. It has been asserted that these speckles are ‘insulator bodies’ of many Su(Hw)–insulator DNA sites held together by associated proteins, including Mod(mdg4). As we show here using flies, larvae and S2 cells, a mutant Mod(mdg4) protein devoid of the Q‐rich domain supports the function of Su(Hw)‐dependent insulators and efficiently binds to correct insulator sites on the chromosome, but does not form or enter the Su(Hw)‐marked nuclear speckles; conversely, the latter accumulate another (C‐truncated) Mod(mdg4) mutant that cannot interact with Su(Hw) or with the genuine insulators. Hence, it is not the functional genomic insulators but rather aggregated proteins that make the so‐called ‘insulator bodies’.