Increased transcriptional activity may cause transcriptional interference in organisms with compact genomes such as the yeast Saccharomyces cerevisiae. Replacement of the yeast ARO4 promoter by the stronger ACT1 promoter increases ARO4 transcription and simultaneously reduces the basal transcription of the downstream HIS7 gene. The open reading frames of ARO4 and HIS7 are tandemly transcribed and are separated by 416 bp. In wild-type cells, a nuclease-resistant site suggests that the two genes are separated by a single positioned nucleosome. Transcriptional interference correlates with Micrococcus nuclease accessibility of this otherwise nuclease-resistant site. Deletion analyses of the region between the two open reading frames revealed that transcriptional interference increases upon removal of either parts of the ARO4 3' end or HIS7 promoter sequences. The abolishment of the Abf1p-binding site within the HIS7 promoter significantly enhances transcriptional interference, resulting in a histidine auxotrophic strain. Our data suggest that the yeast cell prevents transcriptional interference by the combined action of efficient ARO4 transcription termination, the positioning of a fixed nucleosome, and transcription factor binding to the HIS7 promoter.