Overexpression of the human multidrug resistance gene 1 (MDR1) is a negative prognostic factor in leukemia. Despite intense efforts to characterize the gene at the molecular level, little is known about the genetic events that switch on gene expression in P-glycoprotein-negative cells. Recent studies have shown that the transcriptional competence of MDR1 is often closely associated with DNA methylation. Chromatin remodeling and modification targeted by the recognition of methylated DNA provide a dominant mechanism for transcriptional repression. Consistent with this epigenetic model, interference with DNA methyltransferase and histone deacetylase activity alone or in combination can reactivate silent genes. In the present study, we used chromatin immunoprecipitation to monitor the molecular events involved in the activation and repression of MDR1. Inhibitors of DNA methyltransferase (5-azacytidine [5aC]) and histone deacetylase (trichostatin A [TSA]) were used to examine gene transcription, promoter methylation status, and the chromatin determinants associated with the MDR1 promoter. We have established that methyl-CpG binding protein 2 (MeCP2) is involved in methylation-dependent silencing of human MDR1 in cells that lack the known transcriptional repressors MBD2 and MBD3. In the repressed state the MDR1 promoter is methylated and assembled into chromatin enriched with MeCP2 and deacetylated histone. TSA induced significant acetylation of histones H3 and H4 but did not activate transcription. 5aC induced DNA demethylation, leading to the release of MeCP2, promoter acetylation, and partial relief of repression. MDR1 expression was significantly increased following combined 5aC and TSA treatments. Inhibition of histone deacetylase is not an overriding mechanism in the reactivation of methylated MDR1. Our results provide us with a clearer understanding of the molecular mechanism necessary for repression of MDR1.