In this review, we summarize experiments which have used the yeast PHO5 gene to determine the functional consequences of nucleosome structure in the promoter region. In the PHO5 system, nucleosomes participate in promoter repression by interfering with factor binding. Therefore, disruption of nucleosome structure is likely a prerequisite for promoter activation. There still remain several important questions regarding the assembly and disassembly of chromatin repression. Recent experiments have shown that the PHO5 chromatin transition is replication and transcription independent. Nucleosome disruption does, however, depend upon binding of a transactivator, Pho4, to the PHO5 promoter. Moreover, the activation domain of Pho4 appears to play a critical role in chromatin disruption.