Eukaryotic chromosomes are partitioned into topologically associating domains (TADs) that are demarcated by distinct insulator-binding proteins (IBPs) in Drosophila. Whether IBPs regulate specific long-range contacts and how this may impact gene expression remains unclear. Here we identify ‘indirect peaks’ of multiple IBPs that represent their distant sites of interactions through long-range contacts. Indirect peaks depend on protein-protein interactions among multiple IBPs and their common cofactors, including CP190, as confirmed by high-resolution analyses of long-range contacts. Mutant IBPs unable to interact with CP190 impair long-range contacts as well as the expression of hundreds of distant genes that are specifically flanked by indirect peaks. Regulation of distant genes strongly correlates with RNAPII pausing, highlighting how this key transcriptional stage may trap insulator-based long-range interactions. Our data illustrate how indirect peaks may decipher gene regulatory networks through specific long-range interactions.