Insulators are naturally occurring DNA sequences that protect transgenes from genomic position effects, thereby establishing independent functional domains within the chromosome. Recent studies have focused on the identification of the cis and trans requirements for insulator activity. These experiments demonstrate that insulators contain multiple components that cooperate to confer their unique properties. Additionally, they suggest that the mechanism of insulation is related to that of enhancer function. Two models of insulator can be considered: a domain boundary and a transcriptional decoy model.