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Across metazoans, cell cycle progression is regulated by E2F family transcription factors that can function as either transcriptional activators or repressors. For decades, the Drosophila E2F family has been viewed as a streamlined RB/E2F network, consisting of one activator (dE2F1) and one repressor (dE2F2). Here, we report that an uncharacterized isoform of dE2F1, hereon called dE2F1b, plays an important function during development and is functionally distinct from the widely-studied dE2F1 isoform, dE2F1a. dE2F1b contains an additional exon that inserts 16 amino acids to the evolutionarily conserved Marked Box domain. Analysis of de2f1b-specific mutants generated via CRISPR/Cas9 indicates that dE2F1b is a critical regulator of the cell cycle during development. This is particularly evident in endocycling salivary glands in which a tight control of dE2F1 activity is required. Interestingly, close examination of mitotic tissues such as eye and wing imaginal discs suggests that dE2F1b plays a repressive function as cells exit from the cell cycle. We also provide evidence demonstrating that dE2F1b differentially interacts with RBF1 and alters the recruitment of RBF1 and dE2F1 to promoters. Collectively, our data suggest that dE2F1b is a novel member of the E2F family, revealing a previously unappreciated complexity in the Drosophila RB/E2F network., Author summary The Drosophila E2F1 (dE2F1) protein has been studied as one of the principal regulators of cell cycle control in both mitotic cells and cells undergoing a variant cell cycle called the endocycle. dE2F1 is the sole “activator” E2F of the highly streamlined Drosophila RB/E2F network. However, there has been evidence suggesting that this simplistic view of the activator E2F may not be true and that dE2F1 can also provide a repressive function. Elucidating the dual role of dE2F1 in transcriptional regulation has been elusive. In our report, we investigate an uncharacterized isoform of dE2F1 that we have termed as dE2F1b. Notably, the evolutionarily conserved Marked Box domain, which is important for target specificity and protein-protein interactions, is altered in this isoform. Our findings suggest that dE2F1b is required for proper cell cycle control in both mitotic and endocycling cells. Strikingly, we show that dE2F1b has repressive functions in a context-dependent manner. Overall, our findings reveal an unanticipated complexity to dE2F1, providing important insights into the dual function of dE2F1 in transcriptional regulation.