The positions of nucleosomes across the genome influence several cellular processes, including gene transcription. However, our understanding of the factors dictating where nucleosomes are located and how this affects gene regulation is still limited. Here, we perform an extensive in vivo study to investigate the influence of the neighboring chromatin structure on local nucleosome positioning and gene expression. Using truncated versions of the Saccharomyces cerevisiae URA3 gene, we show that nucleosome positions in the URA3 promoter are at least partly determined by the local DNA sequence, with so-called 'antinucleosomal elements' like poly(dA:dT) tracts being key determinants of nucleosome positions. In addition, we show that changes in the nucleosome positions in the URA3 promoter strongly affect the promoter activity. Most interestingly, in addition to demonstrating the effect of the local DNA sequence, our study provides novel in vivo evidence that nucleosome positions are also affected by the position of neighboring nucleosomes. Nucleosome structure may therefore be an important selective force for conservation of gene order on a chromosome, because relocating a gene to another genomic position (where the positions of neighboring nucleosomes are different from the original locus) can have dramatic consequences for the gene's nucleosome structure and thus its expression.