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Enhancers play a critical role in regulating precise gene expression patterns essential for development and cellular identity; however, how gene-enhancer specificity is encoded within the genome is not clearly defined. To investigate how this specificity arises within topologically associated domains (TAD), we performed allele-specific genome editing of sequences surrounding the Lefty1 and Lefty2 paralogs in mouse embryonic stem cells. The Lefty genes arose from a tandem duplication event and these genes interact with each other in chromosome conformation capture assays which place these genes within the same TAD. Despite their physical proximity, we demonstrate that these genes are primarily regulated by separate enhancer elements. Through CRISPR-Cas9 mediated deletions to remove the intervening chromatin between the Lefty genes, we reveal a distance-dependent dosage effect of the Lefty2 enhancer on Lefty1 expression. These findings indicate a role for chromatin distance in insulating gene expression domains in the Lefty locus in the absence of architectural insulation.