Eukaryotic genomes are packaged into nucleosomes that occlude DNA from interacting with most DNA-binding proteins. Nucleosome positioning and chromatin organization is critical for gene regulation. We have investigated the mechanism by which nucleosomes are positioned at the promoters of active and silent rRNA genes (rDNA). The reconstitution of nucleosomes on rDNA results in sequence-dependent nucleosome positioning at the rDNA promoter that mimics the chromatin structure of silent rRNA genes in vivo, suggesting that active mechanisms are required to reorganize chromatin structure upon gene activation. Nucleosomes are excluded from positions observed at active rRNA genes, resulting in transcriptional repression on chromatin. We suggest that the repressed state is the default chromatin organization of the rDNA and gene activation requires ATP-dependent chromatin remodelling activities that move the promoter-bound nucleosome about 22-bp upstream. We suggest that nucleosome remodelling precedes promoter-dependent transcriptional activation as specific inhibition of ATP-dependent chromatin remodelling suppresses the initiation of RNA Polymerase I transcription in vitro. Once initiated, RNA Polymerase I is capable of elongating through reconstituted chromatin without apparent displacement of the nucleosomes. The results reveal the functional cooperation of DNA sequence and chromatin remodelling complexes in nucleosome positioning and in establishing the epigenetic active or silent state of rRNA genes.