Cbf1p is a basic-helix-loop-helix-zipper protein of Saccharomyces cerevisiae required for the function of centromeres and MET gene promoters, where it binds DNA via the consensus core motif CACRTG (R = A or G). At MET genes Cbf1p appears to function in both activator recruitment and chromatin-remodeling. Cbf1p has been implicated in the regulation of other genes, and CACRTG motifs are common in potential gene regulatory DNA. A recent genome-wide location analysis showed that the majority of intergenic CACGTG palindromes are bound by Cbf1p. Here we tested whether all potential Cbf1p binding motifs in the yeast genome are likely to be bound by Cbf1p using chromatin immunoprecipitation. We also tested which of the motifs are actually functional by assaying for Cbf1p-dependent chromatin remodeling. We show that Cbf1p binding and activity is restricted to palindromic CACGTG motifs in promoter-proximal regions. Cbf1p does not function through CACGTG motifs that occur in promoter-distal locations within coding regions nor where CACATG motifs occur alone except at centromeres. Cbf1p can be made to function at promoter-distal CACGTG motifs by overexpression, suggesting that the concentration of Cbf1p is normally limiting for binding and is biased to gene regulatory DNA by interactions with other factors. We conclude that Cbf1p is required for normal nucleosome positioning wherever the CACGTG motif occurs in gene regulatory DNA. Cbf1p has been shown to interact with the chromatin-remodeling ATPase Isw1p. Here we show that recruitment of Isw1p by Cbf1p is likely to be general but that Isw1p is only partially required for Cbf1p-dependent chromatin structures.