Activation of the Saccharomyces cerevisiae PHO5 gene by phosphate starvation is accompanied by the disappearance of two pairs of positioned nucleosomes that flank a short hypersensitive region in the promoter. The transcription factor Pho4 is the key regulator of this transition. By in vitro footprinting it was previously shown that there is a low affinity site (UASp1) which is contained in the short hypersensitive region in the inactive promoter, and a high affinity site (UASp2) which is located in the adjacent nucleosome. To investigate the interplay between nucleosomes and Pho4, we have performed in vivo footprinting experiments with dimethylsulfate. Pho4 was found to bind to both sites in the active promoter. In contrast, it binds to neither site in the repressed promoter. Lack of binding under repressing conditions is largely due to the low affinity of Pho4 for its binding sites under these conditions. Despite the increased affinity of Pho4 for its target sites under activating conditions, binding to UASp2 is prevented by the presence of the nucleosome and can only occur after prior disruption of this nucleosome in a process that requires UASp1. Protection of the PHO5 UASp2 by the nucleosome is not absolute, however, since overexpression of Pho4 can disrupt this nucleosome even when UASp1 is deleted. Also under these conditions, with only UASp2 present, all four nucleosomes at the PHO5 promoter are disrupted, whereas no chromatin change at all is observed when both UAS elements are destroyed.