ATP-dependent chromatin remodelers of the CHD family play important roles during differentiation and development. Three CHD proteins, dMi-2, dChd1, and Kismet, have been described for Drosophila melanogaster. Here, we study dCHD3, a novel member of the CHD family. dCHD3 is related in sequence to dMi-2 but lacks several domains implicated in dMi-2 function. We demonstrate that dCHD3 is a nuclear protein and that expression is tightly regulated during fly development. Recombinant dCHD3 remodels mono- and polynucleosomes in an ATP-dependent manner in vitro. Its chromodomains are critical for nucleosome binding and remodeling. Unlike dMi-2, dCHD3 exists as a monomer. Nevertheless, both proteins colocalize with RNA polymerase II to actively transcribed regions on polytene chromosomes, suggesting that both remodelers participate in the process of transcription.