Myc is a conserved transcription factor with a role in the regulation of genes that are involved in growth and development. The abundance of Myc protein in the cells must be exquisitely controlled to avoid growth abnormalities caused by too much or too little Myc. An intriguing mode of regulation exists in which overabundance of Myc protein triggers a negative feedback regulation that leads to its abundance. In this study, I illustrate a mechanism for dMyc negative feedback regulation in Drosophila embryogenesis. I show that Drosophila Myc protein (dMyc) binds to the microRNA miR-308 locus and increases its expression. An increase in miR-308 levels leads to destabilization of dMyc mRNA and reduced dMyc protein levels. In vivo knockdown of miR-308 confirmed constant regulation of dMyc levels by miR-308 in embryos. My results also show that this regulatory loop is crucial for maintaining appropriate dMyc levels and normal development. Perturbation of the loop, either by elevated miR-308 or elevated dMyc, caused lethality. Combining elevated levels of both, therefore restoring balance between mir-308 and dMyc levels, resulted in suppression of lethality. These results reveal a sensitive feedback mechanism that is crucial to prevent the pathologies caused by abnormal levels of dMyc. Moreover, I show that the cross-regulation of dMyc and miR-308 has a role in regulation of dMyc target genes. In the second part of this study, I show that dMyc localizes in histone locus bodies during replication. The work that I describe here began with an observation of unexpected, punctate spots of Myc protein in certain regions of Drosophila embryos. I investigated the identity of these puncta and demonstrate that Myc is co-localized with coilin, a marker for Cajal Bodies (CBs), and Lsm11, a marker for Histone Locus bodies (HLBs), in embryos, larvae and ovaries. Using the MPM-2 antibody, I show that Myc's association with HLBs occurs only during replication in both endocycling and mitotic cells. These results reveal a novel role for Myc in replication-dependent histone mRNA production and processing.