The SWR1C chromatin remodeling enzyme catalyzes ATP-dependent replacement of nucleosomal H2A with the H2A.Z variant, regulating key DNA-mediated processes such as transcription and DNA repair. Here, we investigate the transient kinetic mechanism of the histone exchange reaction, employing ensemble FRET, fluorescence correlation spectroscopy (FCS), and the steady-state kinetics of ATP hydrolysis. Our studies indicate that SWR1C modulates nucleosome dynamics on both the millisecond and microsecond timescales, poising the nucleosome for the dimer exchange reaction. The transient kinetic analysis of the remodeling reaction performed under single turnover conditions unraveled a striking asymmetry in the ATP-dependent replacement of nucleosomal dimers, promoted by localized DNA unwrapping. Taken together, our transient kinetic studies identify intermediates and provide crucial insights into the SWR1C-catalyzed dimer exchange reaction and shed light on how the mechanics of H2A.Z deposition might contribute to transcriptional regulation in vivo.