How the transcription repressing complex Polycomb interacts with transcriptional regulators at housekeeping genes in somatic cells is not well understood. By exploiting a CpG island (CGI) point mutation causing a Mendelian disease, we show that DNA binding of activating transcription factor (TF) determines histone acetylation and nucleosomal depletion commensurate with Polycomb exclusion from the target promoter. Lack of TF binding leads to reversible transcriptional repression imposed by nucleosomal compaction and consolidated by Polycomb recruitment and establishment of bivalent chromatin status. Thus, within a functional hierarchy of transcriptional regulators, TF binding is the main determinant of Polycomb recruitment to the CGI of a housekeeping gene in somatic cells.