We have previously shown that transcription from a Xenopus 5S rRNA gene assembled into chromatin in vitro can be repressed in the absence of histone H1 at high nucleosome densities (one nucleosome per 160 base pairs of DNA) (A. Shimamura, D. Tremethick, and A. Worcel, Mol. Cell. Biol. 8:4257-4269, 1988). We report here that transcriptional repression may also be achieved at lower nucleosome densities (one nucleosome per 215 base pairs of DNA) when histone H1 is present. Removal of histone H1 from the minichromosomes with Biorex under conditions in which no nucleosome disruption was observed led to transcriptional activation. Transcriptional repression could be restored by adding histone H1 back to the H1-depleted minichromosomes. The levels of histone H1 that repressed the H1-depleted minichromosomes failed to repress transcription from free DNA templates present in trans. The assembly of transcription complexes onto the H1-depleted minichromosomes protected the 5S RNA gene from inactivation by histone H1.