The Saccharomyces cerevisiae protein Nhp6A is a model for the abundant and multifunctional high-mobility group B (HMGB) family of chromatin-associated proteins. Nhp6A binds DNA in vitro without sequence specificity and bends DNA sharply, but its role in chromosome biology is poorly understood. We show by whole-genome chromatin immunoprecipitation (ChIP) and high-resolution whole-genome tiling arrays (ChIP-chip) that Nhp6A is localized to specific regions of chromosomes that include ∼23% of RNA polymerase II promoters. Nhp6A binding functions to stabilize nucleosomes, particularly at the transcription start site of these genes. Both genomic binding and transcript expression studies point to functionally related groups of genes that are bound specifically by Nhp6A and whose transcription is altered by the absence of Nhp6. Genomic analyses of Nhp6A mutants specifically defective in DNA bending reveal a critical role of DNA bending for stabilizing chromatin and coregulation of transcription but not for targeted binding by Nhp6A. We conclude that the chromatin environment, not DNA sequence recognition, localizes Nhp6A binding, and that Nhp6A stabilizes chromatin structure and coregulates transcription.