In yeast, unlike in higher eukaryotes, transcriptional activators and repressors do not normally work when bound to DNA at large distances (over 500 base pairs) from the gene and, in particular, when positioned downstream of the gene. This restriction is relieved for a transcriptional activator if a gene bearing an activator binding site is placed near a yeast telomere. The explanation proposed is that the folded structure found at the telomere helps appose the DNA-bound activator with proteins binding to the promoter so that recruitment of the transcriptional machinery can be effected Xat a distanceX. Here, we show that a repressor, Tup1, works when tethered to DNA downstream of, and some 1.5-kb from, the gene when the construct is placed near a yeast telomere. The effect, observed with activated as well as basal transcription, is eliminated by deletion of Sir3. These and other results indicate that DNA-tethered Tup1 represses by interacting with some component of the transcriptional machinery binding to the promoter, an interaction that is facilitated by the preformed loop at the telomere.