The template properties of chromatin were studied in a system in which transcription of unique genes could be examined. Chromatin and DNA were isolated from SV3T3 cells, a line of simian virus 40 (SV40)-transformed mouse cells, and used as templates for Escherichia coli RNA polymerase. The SV4O sequences in the RNA transcribed in vitro and in RNA isolated from the transformed cells were analyzed by hybridization to radioactive RNA transcribed from SV40 DNA. The results indicate that the same sequences of the SV40 "-" strand (DNA strand which serves as a template for early RNA) are transcribed in vitro from chromatin as are found in transformed cells. In contrast, when the DNA isolated from SV3T3 chromatin by removal of proteins is used as a template, the entire SV40 "-" strand is transcribed. It is concluded that the specific template restriction observed with chromatin is due to the presence of proteins associated with the DNA.Much of the DNA of eukaryotic cells is bound to proteins (1). One mechanism for regulation of gene expression in vivo may be that these proteins prevent transcription of the region of DNA to which they are bound. Indeed, the proteins bound to the DNA of purified chromatin do seem to inhibit the ability of specific sequences in the DNA to act as template for transcription by Escherichia coli RNA polymerase in vitro (5,7,12,13), presumably by rendering these sequences inaccessible to the polymerase. Moreover, the DNA sequences of chromatin that are available for transcription in vitro are the same sequences that are transcribed in vivo, at least with respect to families of related or reiterated sequences (8,12,15). Whether such a mechanism operates to repress transcription of unique sequences is not known. If so, it may represent a general mechanism by which gene expression is regulated in eukaryotic cells. Chromatin would thus be an appropriate system for studying eukaryotic gene regulation in cell-free systems.We have attempted to clarify the template properties of chromatin by examining the transcription in vitro of the simian virus (SV)40 genome in SV3T3 cells, a line of mouse fibroblasts transformed by SV40 virus. The use of this system to study chromatin has the following unique advantages. (1) The SV40 genome is integrated into cellular DNA (9) at a frequency of about one copy per cell (4) and is not part of a family of related sequences. Consequently, RNA that hybridizes to SV40 DNA must be a transcript of the integrated SV40 genome, and not of a related sequence. (2) Although the entire viral genome is present (17), less than 70% of the genome is transcribed in transformed cells (10). Consequently, one may determine whether the same regions of the genome are available for transcription in chromatin as are transcribed in vivo. (3) When purified SV40 DNA (covalently closed double-stranded circles) is used as a template for E. coli RNA polymerase, the entire "-" strand (DNA strand that serves as a template for early RNA) is transcribed (19). Therefore, an inability of the poly...