Although Sgf73p, a yeast homologue of human Sca7p, has recently been implicated as a new component of Spt-Ada-Gcn5-acetyltransferase (SAGA), its association with SAGA and functional role in regulation of transcription remain unknown in vivo. Here, using a chromatin immunoprecipitation (ChIP) assay, we show in vivo that, like SAGA, Sgf73p is recruited to the upstream activating sequence (UAS) of a SAGA-dependent gene, GAL1, in an activator-dependent manner. Further, Sgf73p is required for recruitment of SAGA to the GAL1 UAS, and facilitates formation of the preinitiation complex (PIC) assembly at the GAL1 promoter. When PIC is not formed in Deltasgf73, histone H3 is not evicted from the GAL1 promoter. Interestingly, PIC formation at GAL1 is not regulated by histone H3 acetylation or histone acetyltransferase (HAT) activity of SAGA. Similarly, Sgf73p facilitates PIC formation at another SAGA-dependent gene, ADH1, independent of histone H3 acetylation or HAT. In contrast, Sgf73p stimulates PIC formation at PHO84 (a SAGA-dependent gene), in a HAT-dependent-manner. Collectively, our data reveal that Sgf73p is required for SAGA recruitment, and stimulates PIC formation either in a HAT-dependent or -independent manner, providing significant information on how Sgf73p and possibly human Sca7p function physiologically.