The histone variant H2A.Z is an important regulator of transcription. One unsolved mystery is that why H2A.Z can have both activating and repressive effects on gene expression. By examining both coding and non-coding RNA transcripts in S.cerevisiae, we established that H2A.Z is present at both coding and non-coding promoters and have positive effects on the level of transcripts. The repressive effect of H2A.Z can be partially explained by the sense transcripts of gene being antagonised by H2A.Z-activated antisense transcripts. We also established that H2A.Z-associated non-coding transcripts are predominantly located at bidirectional promoters. The sense and antisense pairs produced from bidirectional promoters show high degrees of coregulation (especially co-activation) during stress response. Surprisingly, we found that the non-coding RNA co-activated with stress-response genes tend to spread the activation signal to the neighbouring gene further upstream, indicating their potential functions in gene regulation. In addition, we also observed that accumulation of H2A.Z at gene promoters is associated with slower recovery from gene induction, which could be related to the Ino80 pathway. In general, our results confirmed the interleaved nature of regulatory system in eukaryotes and highlighted the importance of taking both coding and non-coding transcripts into account while studying the transcriptional regulation.