Imitation switch (ISWI)-family remodelling enzymes regulate access to genomic DNA by mobilizing nucleosomes. These ATP-dependent chromatin remodellers promote heterochromatin formation and transcriptional silencing by generating regularly spaced nucleosome arrays. The nucleosome-spacing activity arises from the dependence of nucleosome translocation on the length of extranucleosomal linker DNA, but the underlying mechanism remains unclear. Here we study nucleosome remodelling by human ATP-dependent chromatin assembly and remodelling factor (ACF), an ISWI enzyme comprising a catalytic subunit, Snf2h, and an accessory subunit, Acf1 (refs 2, 11, 12, 13). We find that ACF senses linker DNA length through an interplay between its accessory and catalytic subunits mediated by the histone H4 tail of the nucleosome. Mutation of AutoN, an auto-inhibitory domain within Snf2h that bears sequence homology to the H4 tail, abolishes the linker-length sensitivity in remodelling. Addition of exogenous H4-tail peptide or deletion of the nucleosomal H4 tail also diminishes the linker-length sensitivity. Moreover, Acf1 binds both the H4-tail peptide and DNA in an amino (N)-terminal domain dependent manner, and in the ACF-bound nucleosome, lengthening the linker DNA reduces the Acf1-H4 tail proximity. Deletion of the N-terminal portion of Acf1 (or its homologue in yeast) abolishes linker-length sensitivity in remodelling and leads to severe growth defects in vivo. Taken together, our results suggest a mechanism for nucleosome spacing where linker DNA sensing by Acf1 is allosterically transmitted to Snf2h through the H4 tail of the nucleosome. For nucleosomes with short linker DNA, Acf1 preferentially binds to the H4 tail, allowing AutoN to inhibit the ATPase activity of Snf2h. As the linker DNA lengthens, Acf1 shifts its binding preference to the linker DNA, freeing the H4 tail to compete AutoN off the ATPase and thereby activating ACF.