Specific DNA sequences from several DNase I hypersensitive sites located upstream of the tyrosine aminotransferase (TAT) gene are bound by ubiquitous nuclear factors in vitro. Genomic footprinting has shown, however, that proteins are excluded from their potential binding sites in cells where the gene is inactive and that the absence of in vivo footprints is correlated with CpG methylation and altered chromatin structures at these sites. In vitro, interactions of proteins with sequences of the TAT gene, including binding of the transcription factor CREB to the cAMP-responsive element (CRE), are prevented by a methylated CpG dinucleotide in the respective binding sites, suggesting that methylation of DNA might be sufficient to exclude proteins from their sites in vivo. To test directly whether the absence of in vivo footprints is the result if DNA methylation, we treated two different cell lines with 5-azacytidine to demethylate CpG dinucleotides. While genomic sequencing confirmed demethylation at two widely separated regions upstream of the TAT promoter, no footprints appeared in these cell lines, even though proteins capable of binding these sites in vitro were present in the nuclei. Thus, the simple model whereby protein exclusion in vivo is caused solely by DNA methylation is not appropriate in this case. The nucleosomal organization of the potential binding sites suggests that chromatin structure is a dominant determinant in maintaining the inactive state of these sites.