Small Maf proteins serve as dual-function transcription factors through an exchange of their heterodimerization partners. For example, as heterodimers with hematopoietic cell-specific p45 NF-E2 or NF-E2-related factors (Nrf), they activate the beta-globin or antioxidative stress enzyme heme oxygenase 1 (HO-1) genes, respectively. In contrast, together with Bach1, they repress these same genes. However, the signals leading to this partner exchange are not known. Using chromatin immunoprecipitation assays in NIH 3T3 cells, we show that heme, an inducer of ho-1, promotes displacement of Bach1 from the MafK-occupied ho-1 enhancers, which is followed by Nrf2 binding to these elements. Whereas histone H3 at the ho-1 enhancers and promoter is hyperacetylated irrespective of gene activity, exposure of cells to heme results in de novo hyperacetylation and hypermethylation of histone H3 in the transcribed region. These data indicate that, under normal conditions, the chromatin structure of ho-1 is in a preactivation state, but transcription is repressed by Bach1. Heme induces switching of Maf dimers, resulting in ho-1 expression. Heme also promotes displacement of Bach1 from the beta-globin locus control region without affecting MafK binding in murine erythroleukemia cells. Thus, heme functions as a signaling molecule for gene expression in higher eukaryotes.