We have used gene competition to study the regulation of the human beta-globin locus in transgenic mice as a model system of a multigene locus. The locus is regulated by the locus control region (LCR), which is required for the expression of all the genes. Analysis of the locus at the single-cell level shows that the LCR appears to interact directly with the genes via a looping mechanism. This interaction is monogenic, and the level of transcription is determined by the frequency and stability of LCR/gene complex formation. These parameters are dependent both on the distance between the LCR and gene(s), and the concentration of transcription factors in the nucleus. Disturbance of complex formation leads to position effects, particularly when the locus is integrated in a heterochromatic environment.