Multiple enzymatic activities are required for transcriptional initiation. The enzyme DNA topoisomerase II associates with gene promoter regions and can generate breaks in double-stranded DNA (dsDNA). Therefore, it is of interest to know whether this enzyme is critical for regulated gene activation. We report that the signal-dependent activation of gene transcription by nuclear receptors and other classes of DNA binding transcription factors, including activating protein 1, requires DNA topoisomerase IIβ-dependent, transient, site-specific dsDNA break formation. Subsequent to the break, poly(adenosine diphosphate–ribose) polymerase–1 enzymatic activity is induced, which is required for a nucleosome-specific histone H1–high-mobility group B exchange event and for local changes of chromatin architecture. Our data mechanistically link DNA topoisomerase IIβ–dependent dsDNA breaks and the components of the DNA damage and repair machinery in regulated gene transcription.