Hypermethylation of the FMR1 promoter reduces its transcriptional activity, resulting in the mental retardation and macroorchidism characteristic of Fragile X syndrome. How exactly methylation causes transcriptional silencing is not known but is relevant if current attempts to reactivate the gene are to be successful. Understanding the effect of methylation requires a better understanding of the factors responsible for FMR1 gene expression. To this end we have identified five evolutionarily conserved transcription factor binding sites in this promoter and shown that four of them are important for transcriptional activity in neuronally derived cells. We have also shown that USF1, USF2, and alpha-Pal/Nrf-1 are the major transcription factors that bind the promoter in brain and testis extracts and suggest that elevated levels of these factors account in part for elevated FMR1 expression in these organs. We also show that methylation abolishes alpha-Pal/Nrf-1 binding to the promoter and affects binding of USF1 and USF2 to a lesser degree. Methylation may therefore inhibit FMR1 transcription not only by recruiting histone deacetylases but also by blocking transcription factor binding. This suggests that for efficient reactivation of the FMR1 promoter, significant demethylation must occur and that current approaches to gene reactivation using histone deacetylase inhibitors alone may therefore have limited effect.