Drosophila insulators were the first DNA elements discovered to regulate gene expression by delimiting chromatin contacts. Remarkably, it is still unclear how many of them exist in the Drosophila genome and whether they have a pervasive impact on the genome folding. Contrary to vertebrates, there is no evidence that fly insulators block cohesin-mediated chromatin loop extrusion. Therefore, their mechanism of action remains an open question. To bridge these gaps, we mapped genomic contacts, transcriptomes and binding landscapes of insulator associated proteins in Drosophila cells deficient for CTCF and Cp190. With this approach, we discovered hundreds of chromatin insulator elements. Their study indicates that Drosophila insulators play a minor role in shaping the overall chromosome folding patterns but impact chromatin contacts locally at many individual loci. Our observations argue that Cp190 promotes co-binding of other insulator proteins and that the model, where Drosophila insulators block chromatin contacts by forming loops, needs revision. The extended catalogue of insulator elements presented here provides a significant new resource to study mechanisms that shape the folding of eukaryotic genomes.