How deregulation of chromatin modifiers causes malignancies is of general interest. Here, we show that histone H2A T120 is phosphorylated in human cancer cell lines and demonstrate that this phosphorylation is catalyzed by hVRK1. Cyclin D1 was one of ten genes downregulated upon VRK1 knockdown in two different cell lines and showed loss of H2A T120 phosphorylation and increased H2A K119 ubiquitylation of its promoter region, resulting in impaired cell growth. In vitro, H2A T120 phosphorylation and H2A K119 ubiquitylation are mutually inhibitory, suggesting that histone phosphorylation indirectly activates chromatin. Furthermore, expression of a phosphomimetic H2A T120D increased H3 K4 methylation. Finally, both VRK1 and the H2A T120D mutant histone transformed NIH/3T3 cells. These results suggest that histone H2A T120 phosphorylation by hVRK1 causes inappropriate gene expression, including upregulated cyclin D1, which promotes oncogenic transformation.