The yeast PHO5 promoter is a classical model for studying the role of chromatin in gene regulation. To enable biochemical dissection of the mechanism leading to PHO5 activation, we reconstituted the process in vitro. Positioned nucleosomes corresponding to the repressed PHO5 promoter state were assembled using a yeast extract-based in vitro system. Addition of the transactivator Pho4 yielded an extensive DNase I-hypersensitive site resembling induced PHO5 promoter chromatin. Importantly, this remodeling was energy dependent. In contrast, little or no chromatin remodeling was detected at the PHO8 or PHO84 promoter in this in vitro system. Only the PHO5 promoter harbors a high-affinity intranucleosomal Pho4 binding site (UASp) where Pho4 binding can compete with nucleosome formation, prompting us to test the importance of such competition for chromatin remodeling by analysis of UASp mutants in vivo. Indeed, the intranucleosomal location of the UASp element was critical, but not essential, for complete remodeling at the PHO5 promoter in vivo. Further, binding of just the Gal4 DNA binding domain to an intranucleosomal site could increase PHO5 promoter opening. These data establish an auxiliary role for DNA binding competition between Pho4 and histones in PHO5 promoter chromatin remodeling in vivo.The PHO5 promoter in Saccharomyces cerevisiae represents one of the first model systems where the regulatory role of chromatin was recognized (60). Importantly, many mechanistic features that were elucidated in this well-defined and comparatively simple system turned out to be generally applicable to chromatin biology and transcriptional activation. The repressed PHO5 promoter is organized into four positioned nucleosomes (Fig. 1A) (2). A low-affinity binding site for its essential transactivator Pho4, UASp1, is accessible in a short hypersensitive region (sHS2), and a high-affinity site, UASp2, resides in nucleosome Ϫ2. This nucleosome prevents Pho4 from binding UASp2, thereby constituting a chromatin switch for PHO5 regulation (64). Upon induction by phosphate starvation, the PHO5 promoter nucleosomes become remodeled. Nucleosomes Ϫ2 and Ϫ3 are remodeled to a greater extent than nucleosomes Ϫ1 and Ϫ4 (2, 10, 29, 50, 51), and even nucleosome Ϫ5 can become accessible in a Pho4-dependent way (29), which collectively generates an extensive nucleasehypersensitive site (eHS).The molecular mechanism of PHO5 promoter chromatin remodeling has been studied in great detail. Importantly, the opening of PHO5 promoter chromatin is not a consequence of, but rather a prerequisite for, activated transcription, as it occurs independently of transcription in a TATA box deletion mutant (19). Conversely, high levels of transcription have never been observed without chromatin remodeling. PHO5 promoter chromatin remodeling represented the first described in vivo example of histone eviction in trans (11,34,50,51), a mechanism that was soon recognized to operate genomewide (8,36,70).There has been a long-standing search for factors involved in PH...