Aberrant expression of developmentally silenced genes, characteristic of tumor cells and regenerating tissue, is highly correlated with increased cell proliferation. By modeling this process in vitro in synthetic nuclei, we find that DNA replication leads to deregulation of established developmental expression patterns. Chromatin assembly in the presence of adult mouse liver nuclear extract mediates developmental stage-specific silencing of the tumor marker gene alpha-fetoprotein (AFP). Replication of silenced AFP chromatin in synthetic nuclei depletes sequence-specific transcription repressors, thereby disrupting developmentally regulated repression. Hepatoma-derived factors can target partial derepression of AFP, but full transcription activation requires DNA replication. Thus, unscheduled entry into S phase directly mediates activation of a developmentally silenced gene by (i) depleting developmental stage-specific transcription repressors and (ii) facilitating binding of transactivators.