The chromatin remodeler SWR deposits histone H2A.Z at promoters and other regulatory sites via an ATP-driven histone exchange reaction that replaces nucleosomal H2A with H2A.Z. Simultaneous binding of SWR to both H2A nucleosome and free H2A.Z induces SWR ATPase activity and engages the histone exchange mechanism. Swc5 is a conserved subunit of the 14-polypeptide SWR complex that is required for the histone exchange reaction, but its molecular role is unknown. We found that Swc5, although not required for substrate binding, is required for SWR ATPase stimulation, suggesting that Swc5 is required to couple substrate recognition to ATPase activation. A biochemical complementation assay was developed to show that a unique, conserved domain at the C-terminus of Swc5, called Bucentaur (BCNT), is essential for the histone exchange activity of SWR, whereas an acidic region at the N-terminus is required for optimal SWR function. In vitro studies showed the acidic N-terminus of Swc5 preferentially binds to the H2A-H2B dimer and exhibits histone chaperone activity. We propose that an auxiliary function of Swc5 in SWR is to assist H2A ejection as H2A.Z is inserted into the nucleosome.