Chromatin loops juxtapose distal enhancers with active promoters, but their molecular architecture and relationship with transcription remain unclear. In erythroid cells, the locus control region (LCR) and β-globin promoter form a chromatin loop that requires transcription factor GATA1 and the associated molecule Ldb1. We employed artificial zinc fingers (ZF) to tether Ldb1 to the β-globin promoter in GATA1 null erythroblasts, in which the β-globin locus is relaxed and inactive. Remarkably, targeting Ldb1 or only its self-association domain to the β-globin promoter substantially activated β-globin transcription in the absence of GATA1. Promoter-tethered Ldb1 interacted with endogenous Ldb1 complexes at the LCR to form a chromatin loop, causing recruitment and phosphorylation of RNA polymerase II. ZF-Ldb1 proteins were inactive at alleles lacking the LCR, demonstrating that their activities depend on long-range interactions. Our findings establish Ldb1 as a critical effector of GATA1-mediated loop formation and indicate that chromatin looping causally underlies gene regulation.