Members of the ISWI family of chromatin remodeling factors exhibit ATP-dependent nucleosome sliding, loading, and spacing activities in vitro. However, it is unclear which of these activities are utilized by ISWI complexes to remodel chromatin in vivo. We therefore sought to identify the mechanisms of chromatin remodeling by Saccharomyces cerevisiae Isw2 complex at its known sites of action in vivo. To address this question, we developed a method of identifying intermediates of the Isw2-dependent chromatin remodeling reaction as it proceeded. We show that Isw2 complex catalyzes nucleosome sliding at two different classes of target genes in vivo, in each case sliding nucleosomes closer to the promoter regions. In contrast to its biochemical activities in vitro, nucleosome sliding by Isw2 complex in vivo is unidirectional and localized to a few nucleosomes at each site, suggesting that Isw2 activity is constrained by cellular factors.