The yeast CUP1 gene is activated by the copper-dependent binding of the transcriptional activator, Ace1p. An episome containing transcriptionally active or inactive CUP1 was purified in its native chromatin structure from yeast cells. The amount of RNA polymerase II on CUP1 in the purified episomes correlated with its transcriptional activity in vivo. Chromatin structures were examined by using the monomer extension technique to map translational positions of nucleosomes. The chromatin structure of an episome containing inactive CUP1 isolated from ace1Delta cells is organized into clusters of overlapping nucleosome positions separated by linkers. Novel nucleosome positions that include the linkers are occupied in the presence of Ace1p. Repositioning was observed over the entire CUP1 gene and its flanking regions, possibly over the entire episome. Mutation of the TATA boxes to prevent transcription did not prevent repositioning, implicating a chromatin remodeling activity recruited by Ace1p. These observations provide direct evidence in vivo for the nucleosome sliding mechanism proposed for remodeling complexes in vitro and indicate that remodeling is not restricted to the promoter but occurs over a chromatin domain including CUP1 and its flanking sequences.