Background: Tracking dynamic protein-chromatin interactions in vivo is key to unravel transcriptional and epigenetic transitions in development and disease. However, limited availability and heterogeneous tissue composition of in vivo source material impose challenges on many experimental approaches. Results: Here we adapt cell-type-specific DamID-seq profiling for use in Drosophila imaginal discs and make FLP/FRT-based induction accessible to GAL driver-mediated targeting of specific cell lineages. In a proof-of-principle approach, we utilize ubiquitous DamID expression to describe dynamic transitions of Polycomb-binding sites during wing imaginal disc development and in a scrib tumorigenesis model. We identify Atf3 and Ets21C as novel Polycomb target genes involved in scrib tumorigenesis and suggest that target gene regulation by Atf3 and AP-1 transcription factors, as well as modulation of insulator function, plays crucial roles in dynamic Polycomb-binding at target sites. We establish these findings by DamID-seq analysis of wing imaginal disc samples derived from 10 larvae. Conclusions: Our study opens avenues for robust profiling of small cell population in imaginal discs in vivo and provides insights into epigenetic changes underlying transcriptional responses to tumorigenic transformation.