Friedreich ataxia (FRDA), the most common hereditary ataxia, is caused by mutations in the frataxin (FXN) gene. The vast majority of FRDA mutations involve expansion of a GAA*TTC-repeat tract in intron 1, which leads to an FXN mRNA deficit. Bisulfite mapping demonstrates that the region adjacent to the repeat was methylated in both unaffected and affected individuals. However, methylation was more extensive in patients. Additionally, three residues were almost completely methylation-free in unaffected individuals but almost always methylated in those with FRDA. One of these residues is located within an E-box whose deletion caused a significant drop in promoter activity in reporter assays. Elevated levels of histone H3 dimethylated on lysine 9 were seen in FRDA cells consistent with a more repressive chromatin organization. Such chromatin is known to reduce transcription elongation. This may be one way in which the expanded repeats contribute to the frataxin deficit in FRDA. Our data also suggest that repeat-mediated chromatin changes may also affect transcription initiation by blocking binding of factors that increase frataxin promoter activity. Our results also raise the possibility that the repeat-mediated increases in DNA methylation in the FXN gene in FRDA patients are secondary to the chromatin changes.