Chromatin insulators demarcate the genome into distinct transcriptional domains and contribute to higher-order genome organization. In Drosophila, Su(Hw), CP190, and Mod(mdg4)67.2 are core protein components of the gypsy insulator complex. Multimerization of these core components contributes to formation of large structures within the nucleus termed insulator bodies. Post-translational modifications of insulator proteins appear to affect insulator body localization and be required for full insulator activity, but few factors involved in these processes have been identified. To address this gap in understanding, we performed a high-throughput visual screen for Mod(mdg4)67.2-GFP localization using a ubiquitination-related RNAi library. We identified ubiquitination pathway proteins Effete (Eff) and Cullin 4 (Cul4), as novel regulators of gypsy insulator complex localization and function. Both Eff and Cul4 physically associate with gypsy insulator proteins and promote gypsy-dependent insulator barrier activity. Moreover, Cul4 extensively colocalizes with CP190 on chromatin and assists in the recruitment of CP190 to gypsy sites. Both Eff and Cul4 affect transcription near topologically associating domain (TAD) borders, with Eff specifically altering the 3D nuclear positioning of gypsy insulator sites. Overall, our findings reveal a novel role for ubiquitin-related enzymes in chromatin insulator activity, 3D genome organization, and gene expression.