Animal genomes fold into contact domains defined by enhanced internal contact frequencies with debated functions in establishing independent gene regulatory domains. A large fraction of contact domains in mammals are formed by stalling of chromosomal loop-extruding cohesin by CTCF at domain boundaries. 90% of domain boundaries in Drosophila form CTCF-independently, and other proteins were proposed to form chromosomal loops with dual functions of segregating promoters from inappropriate regulatory elements and connecting distal regulatory elements to their correct targets. Here, we genetically ablate the ubiquitous boundary-associated factor Cp190 and assess impacts on genome folding and transcriptional regulation in embryos. Our results reveal that Cp190 is a major factor required for contact domain boundary formation and gene insulation in Drosophila.