Chromatin states of genes and transposable elements (TEs) dictated by combinations of various histone modifications comprise key information for understanding the mechanisms of genome organization and regulation. However, little is known about the principles of their dynamic changes during development and evolution in a three-dimensional genome context. To address this, we study Drosophila pseudoobscura, a Drosophila model species that diverged from D. melanogaster about 25 million years ago. We collected 71 epigenomic datasets targeting 11 histone modification marks and 4 Hi-C datasets, and projected 15 chromatin states across four different developmental stages and two adult tissues. We estimate that before zygotic genome activation, 41% of the genome has already been deposited with histone modifications, while 20% of the rest genome switches from a ‘null’ state to an active/inactive chromatin state after the zygotic genome activation. Over two thirds of the genomic region exhibit at least one transition between different chromatin states during development. And such transitions on cis-regulatory regions are associated with tissue- or stage-specific formation of chromatin loops or topologically associated domain borders (TABs), as well as specific activation of gene expression. We further demonstrate that while evolutionarily young TEs are preferentially targeted by silencing histone modifications, old TEs are more frequently domesticated as TABs or specific enhancers that further contribute to the genome organization or local gene regulation. Interestingly, this trend is reversed on the newly evolved X chromosome in D. pseudoobscura, due to the acquisition of dosage compensation mechanism. Overall we characterize the developmental and evolutionary dynamics of Drosophila epigenomic states, and highlight the roles of certain TEs of different evolutionary ages in genome organization and regulation.