To establish the cellular functions of DNA topoisomerase I-B (Top1p) at a global level, we have determined the expression profiles and histone modification patterns affected by TOP1 gene deletion (DeltaTOP1) in Saccharomyces cerevisiae. In exponentially growing cells, DeltaTOP1 specifically increases transcription of telomere-proximal genes and decreases glucose utilization and energy production pathways. Immunoprecipitation data demonstrate that Top1p can bind to and is catalytically active at telomeric DNA repeats, and that both DeltaTOP1 and an inactive Y727F Top1p mutant increase H4 histone acetylation at telomere-proximal regions. Interestingly, while the Y727F mutation has no influence on enzyme recruitment to chromatin sites, it has a marked effect on H4 K16 acetylation at subtelomeric regions. The Top1p mutation also increases H3 histone K4 dimethylation, which has been associated with gene transcription, at 3' termini of subtelomeric genes. No major effect of DeltaTOP1 or mutation was detected on Sir3p recruitment; however, DeltaTOP1 has an effect on transcript levels of genes known to regulate telomeric silencing. Thus, the findings indicate that Top1p activity can favor both a repressed chromatin organization and a reduced gene expression level at telomere-proximal regions in yeast. As telomere-proximal regions are known to be enriched for stress-activated genes, our findings show that Top1p can optimize transcript levels for cell growth in exponentially growing cells under a synthetic medium with glucose.