Normal human cells rarely undergo spontaneous immortalization. Given that ectopic expression of the human telomerase catalytic subunit hTERT leads to cellular immortalization, the endogenous hTERT gene is likely constitutively repressed. Hence, we have examined the chromatin structure of the native hTERT locus and the neighboring loci, CRR9 and Xtrp2, in normal human fibroblasts and a set of immortal lines. Using generalized DNase I sensitivity assays, we revealed that the entire hTERT gene was embedded in a chromatin domain that was as resistant to the nuclease as the well studied beta-globin loci in both telomerase-positive and -negative cells. This condensed domain was at least 100 kb in size and contained the intergenic region 5' to the hTERT gene and the downstream Xtrp2 locus. A transition from the nuclease-sensitive CRR9 locus to the condensed region appeared near the 3'-end of the CRR9 gene. hTERT transcription was associated with the appearance of a major DNase I-hypersensitive site positioned around the hTERT transcription start site and several minor hypersensitive sites. In telomerase-negative cells, the inhibition of histone deacetylases by trichostatin A led to the opening of this chromatin domain, accompanied by transcription from the hTERT gene but not the Xtrp2 gene. In contrast, the inhibition of protein synthesis by cycloheximide induced transcription from both the hTERT and Xtrp2 genes, indicating that histone deacetylases and labile factors coordinate to silence this chromosomal region. Taken together, our data suggest a novel mechanism of hTERT regulation at the chromatin level and have important implications for studying telomerase expression.