The combination of chromatin structure and the organization of chromosomes in eukaryotic nuclei affects many genome functions. Distinct functional states of genes ranging from ‘highly active’ to ‘silenced’ correlate with particular nucleosome arrangements, histone variants, histone modifications, and interactions of non-histone regulators. Transcription factors that recognize and bind specific DNA sequences recruit chromatin modulators to specific genes via protein interactions. However, little is known about how chromosomal domains or entire chromosomes are targeted to implement particular chromatin structures and activity states. Here we discuss emerging concepts of how DNA sequence can contribute to chromatin organization at the domain level. Inspiration and motivation for this discourse comes from the unresolved question of how X chromosomes are identified for dosage compensation.