There is increasing evidence that specific chromatin structures play an important role in the regulation of transcription in eukaryotes. The mouse mammary tumor virus (MMTV) promoter, which is reproducibly assembled into a phased array of six nucleosomes when introduced into cells, represents a particularly well-studied example. The second or B nucleosome of the phased array is disrupted in response to hormone stimulation, allowing the assembly of a preinitiation complex and the activation of transcription. In vitro experiments demonstrate that the assembly of the proximal promoter into chromatin is sufficient to prevent the binding of transcription factors such as nuclear factor 1. Consequently it is argued that chromatin serves to restrict the access of ubiquitous transcription factors in the absence of hormone stimulation. We have employed an in vivo exonuclease III (ExoIII)/Taq polymerase footprinting assay to study the hormone-dependent loading of transcription factors on the MMTV promoter. This assay makes use of stable mouse and human cell lines harboring bovine papilloma virus chimeras of the MMTV promoter attached to a reporter gene. To ascertain the significance of protein-chromatin interactions vs protein-DNA interactions, we examined transcription factor binding to chromatin and nonchromatin templates of the MMTV promoter within the same cells. By the use of primers specific for each of the two distinct reporter genes, and restriction enzymes that generate entry sites for ExoIII, we can distinguish chromatin and nonnucleosomal templates in vivo. This system has allowed us to visualize the assembly of multicomponent transcription preinitiation complexes and to ascertain the consequences of defined chromatin structures on the binding of individual transcription factors in vivo.