Basic helix-loop-helix (bHLH) transcription factors such as atonal homolog 5 (ATH5) and neurogenin 2 (NGN2) determine crucial events in retinogenesis. Using chromatin immunoprecipitation, we demonstrate that their interactions with target promoters undergo dynamic changes as development proceeds in the chick embryo. Chick ATH5 associates with its own promoter and with the promoter of the beta3 nicotinic receptor specifically in retinal ganglion cells and their precursors. NGN2 binds to the ATH5 promoter in retina but not in optic tectum, suggesting that interactions between bHLH factors and chromatin are highly tissue specific. The transcriptional activations of both promoters correlate with dimethylation of lysine 4 on histone H3. Inactivation of the ATH5 promoter in differentiated neurons is accompanied by replication-independent chromatin de-methylation. This report is one of the first demonstrations of correlation between gene expression, binding of transcription factors and chromatin modification in a developing neural tissue.