In the work reported here we have undertaken a functional dissection of a 
Polycomb response element (PRE) from the iab-7 cis-regulatory domain of the 
Drosophila melanogaster bithorax complex (BX-C). Previous studies mapped the 
iab-7 PRE to an 860-bp fragment located just distal to the Fab-7 boundary. 
Located within this fragment is an approximately 230-bp chromatin-specific 
nuclease-hypersensitive region called HS3. We have shown that HS3 is capable of 
functioning as a Polycomb-dependent silencer in vivo, inducing pairing-dependent 
silencing of a mini-white reporter. The HS3 sequence contains consensus binding 
sites for the GAGA factor, a protein implicated in the formation of 
nucleosome-free regions of chromatin, and Pleiohomeotic (Pho), a Polycomb group 
protein that is related to the mammalian transcription factor YY1. We show that 
GAGA and Pho interact with these sequences in vitro and that the consensus 
binding sites for the two proteins are critical for the silencing activity of 
the iab-7 PRE in vivo.