The terminal differentiation of adult stem cell progeny depends on transcriptional control. A dramatic change in gene expression programs accompanies the transition from proliferating spermatogonia to postmitotic spermatocytes, which prepare for meiosis and subsequent spermiogenesis. More than a thousand spermatocyte-specific genes are transcriptionally activated in early Drosophila spermatocytes. Here we describe the identification and initial characterization of dany, a gene required in spermatocytes for the large-scale change in gene expression. Similar to tMAC and tTAFs, the known major activators of spermatocyte-specific genes, dany has a recent evolutionary origin, but it functions independently. Like dan and danr, its primordial relatives with functions in somatic tissues, dany encodes a nuclear Psq domain protein. Dany associates preferentially with euchromatic genome regions. In dany mutant spermatocytes, activation of spermatocyte-specific genes and silencing of non-spermatocyte-specific genes are severely compromised and the chromatin no longer associates intimately with the nuclear envelope. Therefore, as suggested recently for Dan/Danr, we propose that Dany is essential for the coordination of change in cell type-specific expression programs and large-scale spatial chromatin reorganization.