Centromere sequences are not conserved between species, and there is compelling evidence for epigenetic regulation of centromere identity, with location being dictated by the presence of chromatin containing the histone H3 variant CENP-A. Paradoxically, in most organisms CENP-A chromatin generally occurs on particular sequences. To investigate the contribution of primary DNA sequence to establishment of CENP-A chromatin in vivo, we utilised the fission yeast Schizosaccharomyces pombe. CENP-ACnp1 chromatin is normally assembled on ∼10 kb of central domain DNA within these regional centromeres. We demonstrate that overproduction of S. pombe CENP-ACnp1 bypasses the usual requirement for adjacent heterochromatin in establishing CENP-ACnp1 chromatin, and show that central domain DNA is a preferred substrate for de novo establishment of CENP-ACnp1 chromatin. When multimerised, a 2 kb sub-region can establish CENP-ACnp1 chromatin and form functional centromeres. Randomization of the 2 kb sequence to generate a sequence that maintains AT content and predicted nucleosome positioning is unable to establish CENP-ACnp1 chromatin. These analyses indicate that central domain DNA from fission yeast centromeres contains specific information that promotes CENP-ACnp1 incorporation into chromatin. Numerous transcriptional start sites were detected on the forward and reverse strands within the functional 2 kb sub-region and active promoters were identified. RNAPII is enriched on central domain DNA in wild-type cells, but only low levels of transcripts are detected, consistent with RNAPII stalling during transcription of centromeric DNA. Cells lacking factors involved in restarting transcription—TFIIS and Ubp3—assemble CENP-ACnp1 on central domain DNA when CENP-ACnp1 is at wild-type levels, suggesting that persistent stalling of RNAPII on centromere DNA triggers chromatin remodelling events that deposit CENP-ACnp1. Thus, sequence-encoded features of centromeric DNA create an environment of pervasive low quality RNAPII transcription that is an important determinant of CENP-ACnp1 assembly. These observations emphasise roles for both genetic and epigenetic processes in centromere establishment.