The incorporation of histone variants into nucleosomes represents one way of altering the chromatin structure to accommodate diverse functions. Histone variant H2A.Z has specific roles in gene regulation, heterochromatin boundary formation, and genomic integrity. The precise features required for H2A.Z to function and specify an identity different from canonical H2A remain to be fully explored. Analysis of the C-terminal docking domain of H2A.Z in Saccharomyces cerevisiae using epistatic miniarray profile (E-MAP) uncovered nuanced requirements of the H2A.Z C-terminal region for cell growth when additional genes were compromised. Moreover, the H2A.Z(1–114) truncation, lacking the last 20 amino acids of the protein, did not support regular H2A.Z functions, such as resistance to genotoxic stress, restriction of heterochromatin in its native context, GAL1 gene activation, and chromatin anchoring. The corresponding region of H2A could fully rescue the strong defects caused by loss of this functionally essential region in the C terminus of H2A.Z. Despite the dramatic reduction in function, the H2A.Z(1–114) truncation still bound the H2A.Z deposition complex SWR1-C, the histone chaperone Chz1, and histone H2B. These data are consistent with a model in which retaining the variant in chromatin after its deposition by SWR1-C is a crucial determinant of its function.