We have examined the basis of enhancer effects on gene expression by altering the action of enhancers on expression of a stably integrated reporter gene. We used two distinct experimental approaches: recombinase-mediated deletion of an enhancer and modulation of the activity of another enhancer composed of downstream metal response elements (MREs). The flp recombinase was used to delete the 5'HS2 globin enhancer from a site downstream of beta-geo at nine separate integration sites in K562 erythroleukemia cells. In no case does deletion of 5'HS2 have a significant effect on the level of expression; however, the deletion does increase dramatically the rate at which expression of beta-geo is silenced. Zinc stimulation of a metallothionein enhancer has no effect on the level of reporter expression, but slows the rate of silencing. Silencing in both cases is highly site dependent, and resembles position-effect variegation (PEV). These results strongly support a binary mode of enhancer action, as in both cases the enhancer maintains reporter expression without a strong effect on the level of expression. Taken together, these findings suggest that transcriptional activators have a direct interaction with repressive chromatin structures, which is independent of an effect on the rate of transcription. We propose that cis-acting transcriptional control elements may act primarily through this mechanism.