Abstract: FACT complex is involved in elongation and ensures fidelity in the initiation step of transcription by RNA polymerase (pol) II. Histone variant H2A.Z is found in nucleosomes at the 5'-end of many genes. We report here H2A.Z-chaperone activity of the yeast FACT complex on the short, nucleosome-free, non-coding, pol III-transcribed yeast tRNA genes. On a prototype gene, yeast SUP4, chromatin remodeler RSC and FACT regulate its transcription through novel mechanisms, wherein the two gene-flanking nucleosomes containing H2A.Z, play different roles. Nhp6, which ensures transcription fidelity and helps load yFACT onto the gene flanking nucleosomes, has inhibitory role. RSC maintains a nucleosome abutting the gene terminator downstream, which results in reduced transcription rate in active state while H2A.Z probably helps RSC in keeping the gene nucleosome-free and serves as stress-sensor. All these factors maintain an epigenetic state which allows the gene to return quickly from repressed to active state and tones down the expression from the active SUP4 gene, required probably to maintain the balance in cellular tRNA pool.