Current efforts in nonviral gene therapy are plagued by a pervasive difficulty in sustaining therapeutic levels of delivered transgenes. Minicircles (plasmid derivatives with the same expression cassette but lacking a bacterial backbone) show sustained expression and hold promise for therapeutic use where persistent transgene expression is required. To characterize the widely-observed silencing process affecting expression of foreign DNA in mammals, we used a system in which mouse liver presented with either plasmid or minicircle consistently silences plasmid but not minicircle expression. We found that preferential silencing of plasmid DNA occurs at a nuclear stage that precedes transport of mRNA to the cytoplasm, evident from a consistent >25-fold minicircle/plasmid transcript difference observed in both nuclear and total RNA. Among possible mechanisms of nuclear silencing, our data favor chromatin-linked transcriptional blockage rather than targeted degradation, aberrant processing, or compromised mRNA transport. In particular, we observe dramatic enrichment of H3K27 trimethylation on plasmid sequences. Also, it appears that Pol II can engage the modified plasmid chromatin, potentially in a manner that is not productive in the synthesis of high levels of new transcript. We outline a scenario in which sustained differences at the chromatin level cooperate to determine the activity of foreign DNA.