Smarca5, an ATPase of the ISWI class of chromatin remodelers, is a key regulator of chromatin structure, cell cycle and DNA repair. Smarca5 is deregulated in leukemia and breast, lung and gastric cancers. However, its role in oncogenesis is not well understood. Chromatin remodelers often play dosage-dependent roles in cancer. We therefore investigated the epigenomic and phenotypic impact of controlled stepwise attenuation of Smarca5 function in the context of primary cell transformation, a process relevant to tumor formation. Upon conditional single- or double-allele Smarca5 deletion, the cells underwent both accelerated growth arrest and senescence entry and displayed gradually increased sensitivity to genotoxic insults. These phenotypic characteristics were explained by specific remodeling of the chromatin structure and the transcriptome in primary cells prior to the immortalization onset. These molecular programs implicated Smarca5 requirement in DNA damage repair, telomere maintenance, cell cycle progression and in restricting apoptosis and cellular senescence. Consistent with the molecular programs, we demonstrate for the first time that Smarca5-deficient primary cells exhibit dramatically decreased capacity to bypass senescence and immortalize, an indispensable step during cell transformation and cancer development. Thus, Smarca5 plays a crucial role in key homeostatic processes and sustains cancer-promoting molecular programs and cellular phenotypes.