DNA supercoiling has emerged as a major contributor to gene regulation in bacteria, but how DNA supercoiling impacts transcription dynamics in eukaryotes is unclear. Here, using single-molecule dual-color nascent transcription imaging in budding yeast, we show that transcriptional bursting of divergent and tandem GAL genes is coupled. Temporal coupling of neighboring genes requires rapid release of DNA supercoils by topoisomerases. When DNA supercoils accumulate, transcription of one gene inhibits transcription at its adjacent genes. Transcription inhibition of the GAL genes results from destabilized binding of the transcription factor Gal4. Moreover, wild-type yeast minimizes supercoiling-mediated inhibition by maintaining sufficient levels of topoisomerases. Overall, we discover fundamental differences in transcriptional control by DNA supercoiling between bacteria and yeast and show that rapid supercoiling release in eukaryotes ensures proper gene expression of neighboring genes.