Post-translational modification of histones is a major mechanism of epigenetic regulation of eukaryotic transcription. Drosophila has proven to be an important model system for the study of histone modifying enzymes and the cross talk that occurs between the various modifications. Polytene chromosome analysis and genome-wide chromatin immunoprecipitation (ChIP) studies have provided much insight into the location of marks and many of the enzymes that perform the catalytic reactions. Gene specific effects have been determined through study of flies carrying mutations in histone modifying enzymes. This review will highlight classic studies and present recent progress on both the localization data and mutant analyses. This information has been used to assign function to the marks and to the enzymes that place or remove them, critical for the process of transcriptional regulation.