A gene's transcriptional output is the combined product of two inputs: diffusible factors in the cellular milieu acting in trans, and chromatin state acting in cis. Here, we describe a strategy for dissecting the relative contribution of cis versus trans mechanisms to gene regulation. Referred to as trans complementation, it entails fusing two disparate cell types and searching for genes differentially expressed between the two genomes of fused cells. Any differential expression can be causally attributed to cis mechanisms because the two genomes of fused cells share a single homogenized milieu in trans. This assay uncovered a state of transcriptional competency that we termed 'occluded' whereby affected genes are silenced by cis-acting mechanisms in a manner that blocks them from responding to the trans-acting milieu of the cell. Importantly, occluded genes in a given cell type tend to include master triggers of alternative cell fates. Furthermore, the occluded state is maintained during cell division and is extraordinarily stable under a wide range of physiological conditions. These results support the model that the occlusion of lineage-inappropriate genes is a key mechanism of cell fate restriction. The identification of occluded genes by our assay provides a hitherto unavailable functional readout of chromatin state that is distinct from and complementary to gene expression status.