Saccharomyces cerevisiae RDH54 is a key member of the evolutionarily conserved RAD52 epistasis group of genes needed for homologous recombination and DNA double strand break repair. The RDH54-encoded protein possesses a DNA translocase activity and functions together with the Rad51 recombinase in the D-loop reaction. By chromatin immunoprecipitation (ChIP), we show that Rdh54 is recruited, in a manner that is dependent on Rad51 and Rad52, to a site-specific DNA double strand break induced by the HO endonuclease. Because of its relatedness to Swi2/Snf2 chromatin remodelers, we have asked whether highly purified Rdh54 possesses chromatin-remodeling activity. Importantly, our results show that Rdh54 can mobilize a mononucleosome along DNA and render nucleosomal DNA accessible to a restriction enzyme, indicative of a chromatin-remodeling function. Moreover, Rdh54 co-operates with Rad51 in the utilization of naked or chromatinized DNA as template for D-loop formation. We also provide evidence for a strict dependence of the chromatin-remodeling attributes of Rdh54 on its ATPase activity and N-terminal domain. Interestingly, an N-terminal deletion mutant (rdh54Delta102) is unable to promote Rad51-mediated D-loop formation with a chromatinized template, while retaining substantial activity with naked DNA. These features of Rdh54 suggest a role of this protein factor in chromatin rearrangement during DNA recombination and repair.