The yeast Cyc8 (also known as Ssn6)-Tup1 complex regulates gene expression through a variety of mechanisms, including positioning of nucleosomes over promoters of some target genes to limit accessibility to the transcription machinery. To further define the functions of Cyc8-Tup1 in gene regulation and chromatin remodeling, we performed genome-wide profiling of changes in nucleosome organization and gene expression that occur upon loss of CYC8 or TUP1 and observed extensive nucleosome alterations in both promoters and gene bodies of derepressed genes. Our improved nucleosome profiling and analysis approaches revealed low-occupancy promoter nucleosomes (P nucleosomes) at locations previously defined as nucleosome-free regions. In the absence of CYC8 or TUP1, this P nucleosome is frequently lost, whereas nucleosomes are gained at -1 and +1 positions, accompanying up-regulation of downstream genes. Our analysis of public ChIP-seq data revealed that Cyc8 and Tup1 preferentially bind TATA-containing promoters, which are also enriched in genes derepressed upon loss of CYC8 or TUP1. These results suggest that stabilization of the P nucleosome on TATA-containing promoters may be a central feature of the repressive chromatin architecture created by the Cyc8-Tup1 corepressor, and that releasing the P nucleosome contributes to gene activation.