We studied the mechanism by which an insulator interrupts enhancer signaling to a gene using stably replicated chromatin templates containing the human beta-globin locus control region HS2 enhancer and a target globin gene. The chicken beta-globin 5' HS4 (cHS4) insulator acted as a positional enhancer blocker, inhibiting promoter remodeling and transcription activation only when placed between the enhancer and gene. Enhancer blocking by cHS4 reduced histone hyperacetylation across a zone extending from the enhancer to the gene and inhibited recruitment of CBP and p300 to HS2. Enhancer blocking also led to accumulation of RNA polymerase II at HS2 and within cHS4, accompanied by its diminution at the gene promoter. The enhancer blocking effects were completely attributable to the CTCF binding site in cHS4. These findings provide experimental evidence for the involvement of spreading in establishment of a broad zone of histone modification by an enhancer, as well as for blocking by an insulator of the transfer of RNA polymerase II from an enhancer to a promoter.