Histone variant H2A.Z, a universal mark of dynamic nucleosomes flanking gene promoters and enhancers, is incorporated into chromatin by SRCAP (SWR1), an ATP-dependent, multicomponent chromatin-remodeling complex. The YL1 (Swc2) subunit of SRCAP (SWR1) plays an essential role in H2A.Z recognition, but how it achieves this has been unclear. Here, we report the crystal structure of the H2A.Z-binding domain of Drosophila melanogaster YL1 (dYL1-Z) in complex with an H2A.Z-H2B dimer at 1.9-Å resolution. The dYL1-Z domain adopts a new whip-like structure that wraps over H2A.Z-H2B, and preferential recognition is largely conferred by three residues in loop 2, the hyperacidic patch and the extended αC helix of H2A.Z. Importantly, this domain is essential for deposition of budding yeast H2A.Z in vivo and SRCAP (SWR1)-catalyzed histone H2A.Z replacement in vitro. Our studies distinguish YL1-Z from known H2A.Z chaperones and suggest a hierarchical mechanism based on increasing binding affinity facilitating H2A.Z transfer from SRCAP (SWR1) to the nucleosome.