The human ES cells have the remarkable properties of self-renewal and unlimited potential to differentiate into other cell types in the body. Cell fate determination in ES cells involves selective activation and silencing of specific genes, a process that is accompanied by dynamic modifications of the histone proteins. Among the histone modifications that take place during ES cell differentiation are dynamic methylation of histone H3 at a class of regulatory DNA known as enhancers. Currently, the molecular mechanisms leading to the formation of this characteristic histone modification at enhancers are still unknown. The proposed project is aimed to answer this question. We hypothesize that enhancer function requires binding of sequence specific transcription factors that recruit histone modification enzymes. We also hypothesize that the histone modifications at enhancers in turn facilitate recruitment of chromatin binding proteins and possibly additional transcription factors to mediate transcriptional activation. In the first year of the 5-year project, we have carried out experiments to identify the DNA binding sites for transcription factors Oct4, Sox2, Nanog and Klf4. The results identify a large number of enhancers where these factors act to control gene expression in human ES cells. We have also begun to characterize a chromatin binding protein suspected to recognize the chromatin signature at enhancers.