Although it is generally believed that the 60-and 81-base-pair (60/81-bp) repeats of the Xenopus laevis ribosomal DNA (rDNA) spacer are position-independent transcriptional enhancers, this has not been shown directly. We have now developed a critical assay which proves that the 60/81-bp repeats do, in fact, stimulate transcription from promoters in cis and that they function in both orientations and when up to 1 kilobase pair from the initiation site. However, contrary to the widely accepted view, these elements are found to be highly position dependent, for they have no net effect when downstream of the initiation site within the transcribed region and they behave as transcriptional silencers of promoters in cis when moved >2 kilobase pairs upstream of the initiation site. The 60/81-bp elements therefore are position-dependent 5' enhancers. We also found that this rDNA enhancer was polymerase I specific and that it was composed of duplicated, individually functional elements. Finally, we report an in vitro system that reproduces both cis enhancement and trans competition by the 60/81-bp repeats. Sequential-addition studies in this system demonstrated that the rDNA enhancer functions in trans at or before establishment of the stable transcription complex, not subsequently at each round of transcription.DNA sequences that augment transcription independent of orientation and at various locations relative to a colinear promoter are termed enhancers. First defined in simian virus 40 (SV40) viral DNA, enhancers have since been identified for a large number of cellular and viral genes transcribed by RNA polymerase II (reviewed in references 18, 25, 40, and 50) and more recently also for a gene transcribed by RNA polymerase III (2). Eucaryotic polymerase II enhancers function 5' and usually also 3' of the initiation site and generally over many kilobase pairs (kb), although their effects can decrease significantly at increasing distance (2,18,25,38,40,41,43,50,60); analogous upstream activation sequences in yeast cells are located within -1 kb upstream of the initiation site and do not appear to function 3' of the initiation site (19,56). Polymerase II enhancers are normally assessed by comparing the level of transcription obtained from two otherwise identical templates, one bearing and one lacking these elements, when introduced separately into cells ( a cis stimulation assay). It has been reported that polymerase II enhancers do not markedly depress transcription of promoters on separate molecules (a trans competition assay [6,49,63,64]); however, some polymerase II enhancers and promoters are now known to share common factors (14,29,35,39). Sequences containing or related to polymerase II enhancer elements have also been shown to act as silencers of cis-located promoters. Although a great deal has been learned about sequences that direct RNA polymerase II enhancement and about factors that bind to these sequences (21, 69; reviewed in references 23, 48, 51, and 68), their mechanisms of action are not yet understood.S...