Highly transcribed guanine-run containing sequences, in Saccharomyces cerevisiae, become unstable when topoisomerase I (Top1) is disrupted. Topological changes, such as the formation of extended RNA:DNA hybrids or R-loops or non-canonical DNA structures including G-quadruplexes has been proposed as the major underlying cause of the transcription-linked genome instability. Here, we report that R-loop accumulation at a guanine-rich sequence, which is capable of assembling into the four-stranded G4 DNA structure, is dependent on the level and the orientation of transcription. In the absence of Top1 or RNase Hs, R-loops accumulated to substantially higher extent when guanine-runs were located on the non-transcribed strand. This coincides with the orientation where higher genome instability was observed. However, we further report that there are significant differences between the disruption of RNase Hs and Top1 in regards to the orientation-specific elevation in genome instability at the guanine-rich sequence. Additionally, genome instability in Top1-deficient yeasts is not completely suppressed by removal of negative supercoils and further aggravated by expression of mutant Top1. Together, our data provide a strong support for a function of Top1 in suppressing genome instability at the guanine-run containing sequence that goes beyond preventing the transcription-associated RNA:DNA hybrid formation.