The five human beta-type-globin genes, epsilon, Ggamma, Agamma, delta and beta, are close together and are regulated by a locus control region (LCR) located at the 5' end of the locus. Here we investigate the functional consequences of this organization with respect to temporal regulation of the individual genes, by using recombination techniques to invert the order of either the genes or the LCR in vivo. Our analysis of transgenic mice bearing either normal or mutant transgenes leads to two new observations. First, the position of the epsilon-globin gene next to the LCR is mandatory for its expression during the yolk-sac stage of erythropoiesis. Second, LCR activity is orientation dependent, and so the LCR does not act as a simple enhancer to stimulate transcription of the globin genes. Thus, in the absence of any change in transgene integration position, transgene copy number, trans-acting factors or other resident genetic information, simple inversion of the human genes or the LCR fundamentally alters the transcription of beta-type globin genes.