Using in vivo dimethylsulfate footprinting, we have analyzed protein-DNA interactions within two regions upstream of the tyrosine aminotransferase (TAT) gene that are characterized by an altered chromatin structure in TAT-expressing as compared to nonexpressing cells. All the identified protein contacts to DNA are found exclusively in the TAT-expressing hepatoma cells. In vitro analyses of specific DNA-binding factors in crude nuclear extracts yield DNAase I footprints that correlate well with the binding sites in vivo. Surprisingly, all DNA-binding activities are present in nuclei of TAT-expressing and nonexpressing cells, indicating that the mere presence of factors is not sufficient for their interaction with a binding site in vivo. Genomic sequencing reveals methylation of CpG dinucleotides in the regions analyzed in nonexpressing cells, whereas no methylation is found in TAT-expressing cells. In vitro methylation at a cytosine residue within a footprint region prevents the interaction of a factor with its binding site.