While some ATP-dependent chromatin remodelers are negatively regulated by short tracts of DNA sequences (i.e., poly d(A) or GC-rich), the INO80 chromatin remodeler is regulated by DNA not readily identified by its sequence but rather by its physical properties. The underlying reason for these differences appears to be the unique mechanism by which INO80 mobilizes nucleosomes. We find that the INO80 chromatin remodeler mobilizes nucleosomes by displacing DNA from the histone octamer and creating DNA bulges that translocate around the octamer in a wave-like manner. Nucleosome movement is blocked by inflexible nucleosomal DNA that interferes with the initial formation of DNA bulges and is linked to INO80's accurate positioning of nucleosomes at the +1 position of yeast gene promoters. Some of the interactions of the Arp5 subunit are lost when bound to inflexible DNA and may act as sensors to regulate INO80 remodeling in a DNA-shape-dependent manner.