DNA topoisomerase I (TOP1) has an important role in maintaining DNA topology by relaxing supercoiled DNA. Here we show that the K391 and K436 residues of TOP1 are SUMOylated by the PIAS1-SRSF1 E3 ligase complex in the chromatin fraction containing active RNA polymerase II (RNAPIIo). This modification is necessary for the binding of TOP1 to RNAPIIo and for the recruitment of RNA splicing factors to the actively transcribed chromatin, thereby reducing the formation of R-loops that lead to genome instability. RECQ5 helicase promotes TOP1 SUMOylation by facilitating the interaction between PIAS1, SRSF1 and TOP1. Unexpectedly, the topoisomerase activity is compromised by K391/K436 SUMOylation, and this provides the first in vivo evidence that TOP1 activity is negatively regulated at transcriptionally active chromatin to prevent TOP1-induced DNA damage. Therefore, our data provide mechanistic insight into how TOP1 SUMOylation contributes to genome maintenance during transcription.