Poly [ADP-ribose] polymerase 1 (PARP-1) is a highly abundant chromatin-associated enzyme. It catalyzes the NAD⁺-dependent polymerization of long chains of poly-ADP ribose (PAR) onto itself in response to DNA damage and other cues. More recently, the enzymatic activity of PARP-1 has also been implicated in the regulation of gene expression. The molecular basis for the functional switch from chromatin architectural protein to transcription factor and DNA damage responder, triggered by PARP-1 automodification, is unknown. Here, we show that unmodified PARP-1 engages in at least two high-affinity binding modes with chromatin, one of which does not involve free DNA ends, consistent with its role as a chromatin architectural protein. Automodification reduces PARP-1 affinity for intact chromatin but not for nucleosomes with exposed DNA ends. Automodified (AM) PARP-1 has the ability to sequester histones (both in vitro and in cells) and to assemble nucleosomes efficiently in vitro. This unanticipated nucleosome assembly activity of AM–PARP-1, coupled with the fast turnover of the modification, suggests a model in which DNA damage or transcription events trigger transient histone chaperone activity.