Within canonical eukaryotic nuclei, DNA is packaged with highly conserved histone proteins into nucleosomes, which facilitate DNA condensation and contribute to genomic regulation. Yet the dinoflagellates, a group of unicellular algae, are a striking exception to this otherwise universal feature as they have largely abandoned histones and acquired apparently viral-derived substitutes termed DVNPs (dinoflagellate-viral-nucleoproteins). Despite the magnitude of this transition, its evolutionary drivers remain unknown. Here, using Saccharomyces cerevisiae as a model, we show that DVNP impairs growth and antagonizes chromatin by localizing to histone binding sites, displacing nucleosomes, and impairing transcription. Furthermore, DVNP toxicity can be relieved through histone depletion and cells diminish their histones in response to DVNP expression suggesting that histone reduction could have been an adaptive response to these viral proteins. These findings provide insights into eukaryotic chromatin evolution and highlight the potential for horizontal gene transfer to drive the divergence of cellular systems.