The yeast HO endonuclease is expressed in late G1 in haploid mother cells to initiate mating-type interconversion. Cells can be arrested in G1 by nutrient deprivation or by pheromone exposure, but cells that resume cycling after nutrient deprivation or cyclin-dependent kinase (CDK) inactivation express HO in the first cell cycle, whereas HO is not expressed until the second cycle after release from pheromone arrest. Here, we show that transcription of a long noncoding RNA (lncRNA) mediates this differential response. The SBF and Mediator factors remain bound to the inactive promoter during arrest due to CDK inactivation, and these bound factors allow the cell to remember a transcriptional decision made before arrest. If the presence of mating pheromone indicates that this decision is no longer appropriate, a lncRNA originating at -2700 upstream of the HO gene is induced, and the transcription machinery displaces promoter-bound SBF, preventing HO transcription in the subsequent cell cycle. Further, we find that the displaced SBF is blocked from rebinding due to incorporation of its recognition sites within nucleosomes. Expressing the pHO-lncRNA in trans is ineffective, indicating that transcription in cis is required. Factor displacement during lncRNA transcription could be a general mechanism for regulating memory of previous events at promoters.