A nonhistone phosphatase devoid of detectable protease activity has been purified from nuclear sap by chromatography on DEAE-Sephadex. After linkage to an insoluble agarose matrix, this enzyme was used to dephosphorylate nonhistone proteins obtained from S-phase HeLa cells. Chromatin reconstituted with these dephosphorylated proteins exhibited roughly a 50% reduction in the overall number of initiation sites available for transcription when compared to controls. Specific measurements of transcription of histone genes with use of a complementary DNA probe showed that genes coding for histones are preferentially inhibited after nonhistone dephosphorylation. These results provide the first direct support for the theory that phosphorylation of nonhistone proteins is involved in regulating the availability of individual genes for transcription.