The complexity of regulatory systems in higher eukaryotes, featuring many distantly located enhancers that nonetheless properly activate the target promoters, has prompted the hypothesis that the action of enhancers should be restricted by insulators. Continuing our research on the functional role of insulators and the consequences of their interaction in Drosophila, we studied the interplay of different Su(Hw)-dependent Drosophila insulators. The set of transgenic constructs comprised two consecutive genes (yellow and white) with their enhancers and insulator elements differently arranged in between and/or around the gene(s). All insulators were found to interact in twin or mixed tandems, demonstrating the bypass phenomenon. However, insulator pairing around a gene did not always improve its isolation from an outside enhancer. On the other hand, merely two insulator elements (identical or different) in appropriate positions can permit the expression of one gene but not the gene next to it or, conversely, largely block the transcription of the first gene, while allowing full enhancement of the second, or make them behave similarly. Thus, the results of this study support the model that loop formation by insulators is an essential component of insulator action on a positive and negative regulation of an enhancer-promoter communication.