The PHO5 promoter from Saccharomyces cerevisiae can exist in two chromatin configurations depending on its state of activity. In the repressed promoter a short hypersensitive site containing a binding site for the transcription factor PHO4 is flanked by specifically positioned nucleosomes. After induction two nucleosomes upstream and two downstream of the hypersensitive site are disrupted, and the entire promoter becomes accessible. We have investigated mechanisms responsible for setting up the structure of the repressed state and for the transition. Episomal centromeric plasmids bearing the PHO5 promoter show the same chromatin structure as the endogenous chromosomal copy arguing that the chromosomal context is not essential and that the nucleosomal organization is not set up from a distance. Deleting most of the hypersensitive region including the PHO4 binding site also leaves the positioning of the adjacent nucleosomes in the repressed promoter unchanged indicating that histone-DNA interactions play an important role in setting up nucleosome positions. However, when half of the DNA of a nucleosome is deleted a new nucleosome forms at the same location with respect to the neighboring nucleosome indicating that boundary effects also contribute to nucleosome positioning in the native promoter. Disruption of the nucleosomes under activating conditions is shown to require interaction of PHO4 with its binding site located within the hypersensitive region. This disruption takes place also in two independent constructs in which the TATA box had been deleted and as a result the gene was not transcribed. This result shows for the first time that the generation of active chromatin at a regulated promoter is not the result of gene expression but occurs prior to transcription.