The promoter of the galactose-inducible yeast GCY1 gene allows high rates of basal transcription and is kept free of nucleosomes regardless of growth conditions. The general regulatory factor, Reb1p, as well as the nucleotide sequence of a single Gal4p-binding site, structurally cooperate to exclude nucleosomes from about 480 bp of DNA that spans the UAS(GAL), the Reb1p-binding site, the TATA-box, and the transcriptional initiation sites. Gal4p, which induces transcription of GCY1 about 25-fold in the presence of galactose, is not required for the alteration in chromatin configuration in the promoter upstream region since the hypersensitive site is unchanged when Gal4p is inactive or absent. As soon as either the Reb1p-binding site or the UAS(GAL) or both are mutated, nucleosomes slip into the promoter of GCY1 paralleled by a reduction of basal transcription activity to about 30% in either single mutant and to <10% in the double mutant. In the mutant of the Reb1p-binding site, induction by galactose/Gal4p restores a nucleosome-free state to an extent resembling the GCY1 wild-type promoter, showing that, in principle, activated Gal4p can exclude nucleosomes on its own. Northern blots of GCY1 transcripts confirm that Reb1p modulates basal transcription and has little influence on the galactose-induced state.