It is well accepted that for transcriptional silencing in budding yeast, the evolutionarily conserved lysine deacetylase Sir2, in concert with its partner proteins Sir3 and Sir4, establishes a chromatin structure that prevents RNA polymerase II (Pol II) transcription. However, the mechanism of repression remains controversial. Here, we show that the recruitment of Pol II, as well as that of the general initiation factors TBP and TFIIH, occurs unimpeded to the silent HMRa1 and HMLalpha1/HMLalpha2 mating promoters. This, together with the fact that Pol II is Ser5 phosphorylated, implies that SIR-mediated silencing is permissive to both preinitiation complex (PIC) assembly and transcription initiation. In contrast, the occupancy of factors critical to both mRNA capping and Pol II elongation, including Cet1, Abd1, Spt5, Paf1C, and TFIIS, is virtually abolished. In agreement with this, efficiency of silencing correlates not with a restriction in Pol II promoter occupancy but with a restriction in capping enzyme recruitment. These observations pinpoint the transition between polymerase initiation and elongation as the step targeted by Sir2 and indicate that transcriptional silencing is achieved through the differential accessibility of initiation and capping/elongation factors to chromatin. We compare Sir2-mediated transcriptional silencing to a second repression mechanism, mediated by Tup1. In contrast to Sir2, Tup1 prevents TBP, Pol II, and TFIIH recruitment to the HMLalpha1 promoter, thereby abrogating PIC formation.