Histone variant H2A.Z is a conserved feature of nucleosomes flanking protein-coding genes. Deposition of H2A.Z requires ATP-dependent replacement of nucleosomal H2A by a chromatin remodeler related to the multi-subunit enzyme, yeast SWR1C. How these enzymes use ATP to promote this nucleosome editing reaction remains unclear. Here we use single-molecule and ensemble methodologies to identify three ATP-dependent phases in the H2A.Z deposition reaction. Real-time analysis of single nucleosome remodeling events reveals an initial priming step that occurs after ATP addition that involves a combination of both transient DNA unwrapping from the nucleosome and histone octamer deformations. Priming is followed by rapid loss of histone H2A, which is subsequently released from the H2A.Z nucleosomal product. Surprisingly, rates of both priming and the release of the H2A/H2B dimer are sensitive to ATP concentration. This complex reaction pathway provides multiple opportunities to regulate timely and accurate deposition of H2A.Z at key genomic locations.