The function of upstream binding factor (UBF), an essential component of the RNA polymerase (pol) I preinitiation complex, is unclear. Recently, UBF was found distributed throughout ribosomal gene repeats rather than being restricted to promoter regions. This observation has led to the speculation that one role of UBF binding may be to induce chromatin remodeling. To directly evaluate the impact of UBF on chromatin structure, we used an in vivo assay in which UBF is targeted via a lac repressor fusion protein to a heterochromatic, amplified chromosome region containing lac operator repeats. We show that the association of UBF with this locus induces large-scale chromatin decondensation. This process does not appear to involve common remodeling complexes, including SWI͞SNF and histone acetyltransferases, and is independent of histone H3 lysine 9 acetylation. However, UBF recruits the pol I-specific, TATA box-binding protein containing complex SL1 and pol I subunits. Our results suggest a working hypothesis in which the dynamic association of UBF with ribosomal DNA clusters recruits the pol I transcription machinery and maintains these loci in a transcriptionally competent configuration. These studies also provide an in vivo model simulating ribosomal DNA transactivation outside the nucleolus, allowing temporal and spatial analyses of chromatin remodeling and assembly of the pol I transcription machinery. R ibosomal RNA (rRNA) is encoded by tandem arrays of rDNA genes that are organized in human cells into nucleolar organizing regions (NORs) located on five chromosome pairs. A specific set of transcription factors is dedicated to transcription of rDNA into pre-rRNA that is subsequently processed into 28S, 18S, and 5.8S rRNAs. The rRNAs are packaged with ribosomal proteins to form the large and small subunits of ribosomes (1). Transcription of rDNA is highly specific and extensively regulated, involving a large number of proteins (1-3). Studies based mostly on in vitro assays suggest that transcriptional activation of rDNA involves association of the preinitiation complex with the promoter region followed by recruitment of other factors and RNA polymerase (pol) I subunits. The preinitiation complex has been shown to contain upstream binding factor (UBF) (4) and the TATA box-binding protein (TBP) containing complex SL1 (5).UBF is highly conserved in vertebrate cells from Xenopus to human. It contains five high mobility group boxes, an N terminus necessary for nuclear translocation, and a highly acidic C terminus essential for nucleolar localization (4, 6, 7). Although UBF is involved in pol I transcriptional activation, the mechanism by which it acts remains unclear. The consensus derived mostly from in vitro and some in vivo correlative studies places UBF at the early steps of rDNA transactivation (1, 2, 8). Analyses using in vitro transcription assays indicate that UBF initially binds DNA and is necessary for SL1 binding to form the preinitiation complex (9). Recently, UBF was discovered to literally coat DNA thro...