Although many leukaemia-associated nuclear oncogenes are well characterized, little is known about the molecular details of how they alter gene expression. Here we examined transcription factor complexes and chromatin structure of the human c-FMS gene in normal and leukaemic cells. We demonstrate by in vivo footprinting and chromatin immunoprecipitation assays that this gene is bound by the transcription factor AML1 (RUNX1). In t(8;21) leukaemic cells expressing the aberrant fusion protein AML1-ETO, we demonstrate that this protein is part of a transcription factor complex binding to extended sequences of the c-FMS intronic regulatory region rather than the promoter. The AML1-ETO complex does not disrupt binding of other transcription factors, indicating that c-FMS is not irreversibly epigenetically silenced. However, AML1-ETO binding correlates with changes in the histone modification pattern and increased association of histone deacetylases. Our experiments provide for the first time a direct insight into the chromatin structure of an AML1-ETO-bound target gene.