According to the histone code hypothesis, histone variants and modified histones provide binding sites for proteins that change the chromatin state to either active or repressed. Here, we identify histone variants that regulate the targeting and enzymatic activity of poly(ADP-ribose) polymerase 1 (PARP1), a chromatin regulator in higher eukaryotes. We demonstrate that PARP1 is targeted to chromatin by association with the histone H2A variant (H2Av)—the Drosophila homolog of the mammalian histone H2A variants H2Az/H2Ax—and that subsequent phosphorylation of H2Av leads to PARP1 activation. This two-step mechanism of PARP1 activation controls transcription at specific loci in a signal-dependent manner. Our study establishes the mechanism through which histone variants and changes in the histone modification code control chromatin-directed PARP1 activity and the transcriptional activation of target genes.