Chromatin is the physiological template for many nuclear processes in eukaryotes, including transcription by RNA polymerase II. In vivo, chromatin is assembled from genomic DNA, core histones, linker histones such as histone H1, and nonhistone chromatin-associated proteins. Histone H1 is thought to act as a general repressor of transcription by promoting the compaction of chromatin into higher-order structures. We have used a biochemical approach, including an in vitro chromatin assembly and transcription system, to examine the effects of histone H1 on estrogen receptor α (ERα)-mediated transcription with chromatin templates. We show that histone H1 acts as a potent repressor of ligand- and coactivator-regulated transcription by ERα. Histone H1 exerts its repressive effect without inhibiting the sequence-specific binding of ERα to chromatin or the overall extent of targeted acetylation of nucleosomal histones by the coactivator p300. Instead, histone H1 acts by blocking a specific step in the ERα-dependent transcription process, namely, transcription initiation, without affecting transcription reinitiation. Together, our data indicate that histone H1 acts selectively to reduce the overall level of productive transcription initiation by restricting promoter accessibility and preventing the ERα-dependent formation of a stable transcription preinitiation complex.