The exclusive localization of the histone H3 variant CENP-A to centromeres is essential for accurate chromosome segregation. Ubiquitin-mediated proteolysis helps to ensure that CENP-A does not mislocalize to euchromatin, which can lead to genomic instability. Consistent with this, overexpression of the budding yeast CENP-A(Cse4) is lethal in cells lacking Psh1, the E3 ubiquitin ligase that targets CENP-A(Cse4) for degradation. To identify additional mechanisms that prevent CENP-A(Cse4) misincorporation and lethality, we analyzed the genome-wide mislocalization pattern of overexpressed CENP-A(Cse4) in the presence and absence of Psh1 by chromatin immunoprecipitation followed by high throughput sequencing. We found that ectopic CENP-A(Cse4) is enriched at promoters that contain histone H2A.Z(Htz1) nucleosomes, but that H2A.Z(Htz1) is not required for CENP-A(Cse4) mislocalization. Instead, the INO80 complex, which removes H2A.Z(Htz1) from nucleosomes, promotes the ectopic deposition of CENP-A(Cse4). Transcriptional profiling revealed gene expression changes in the psh1Δ cells overexpressing CENP-A(Cse4). The down-regulated genes are enriched for CENP-A(Cse4) mislocalization to promoters, while the up-regulated genes correlate with those that are also transcriptionally up-regulated in an htz1Δ strain. Together, these data show that regulating centromeric nucleosome localization is not only critical for maintaining centromere function, but also for ensuring accurate promoter function and transcriptional regulation.