Abstract: The SWR1 complex replaces the canonical histone H2A with the variant H2A.Z (Htz1 in yeast) at specific chromatin regions. This dynamic alteration in nucleosome structure provides a molecular mechanism to regulate transcription, gene silencing, chromosome segregation and DNA repair. Here we show that genetic instability, sensitivity to drugs impairing different cellular processes and genome-wide transcriptional misregulation in htz1Delta can be partially or totally suppressed if SWR1 is not formed (swr1Delta), if it forms but cannot bind to chromatin (swc2Delta) or if it binds to chromatin but lacks histone replacement activity (swc5Delta and the ATPase-dead swr1-K727G). These results suggest that in htz1Delta the nucleosome remodelling activity of SWR1 affects chromatin integrity because of an attempt to replace H2A with Htz1 in the absence of the latter. This would impair transcription and, either directly or indirectly, other cellular processes. Specifically, we show that in htz1Delta, the SWR1 complex causes an accumulation of recombinogenic DNA damage by a mechanism dependent on phosphorylation of H2A at Ser129, a modification that occurs in response to DNA damage, suggesting that the SWR1 complex impairs the repair of spontaneous DNA damage in htz1Delta. In addition, SWR1 causes DSBs sensitivity in htz1Delta; consistently, in the absence of Htz1 the SWR1 complex bound near an endonuclease HO-induced DSB at the mating-type (MAT) locus impairs DSB-induced checkpoint activation. Our results support a stepwise mechanism for the replacement of H2A with Htz1 and demonstrate that a tight control of this mechanism is essential to regulate chromatin dynamics but also to prevent the deleterious consequences of an incomplete nucleosome remodelling.