We have characterized an element near the 5'boundary of the chicken~-globin domain that insulates a reporter gene from the activating effects of a nearby p-globin locus control region (5'He2) when assayed in the human erythroid cell line K562. We show that the insulation mechanism is directional, that it operates at the level of transcription, and that it involves the alteration of chromatin structure over the promoter of the gene. The insulator has no significant stimulatory or inhibitory effects of its own. In transgenic Drosophila, the insulator protects the white minigene from position effects. The action of the insulator thus is not restricted to erythroid or mammalian cells, suggesting that such elements may serve an important and widely distributed function in the organization of chromatin structure.