Background Deregulated circular RNAs (circRNAs) are associated with the development of cancer and therapy resistance. However, functional research of circRNAs mostly focus on potential miRNA or protein binding and more potential regulation of circRNA on host gene DNA in cancers are yet to be inspected. Method We performed total RNA sequencing on clinical breast cancer samples and identified the expression patterns of circRNAs and corresponding host genes in patient blood, tumor and adjacent normal tissues. qPCR, northern blot and in situ hybridization were used to validate the dysregulation of circRNA circSMARCA5. A series of procedures including R-loop dot-blotting, DNA-RNA immunoprecipitation and mass spectrum, etc. were conducted to explore the regulation of circSMARCA5 on the transcription of exon 15 of SMARCA5. Moreover, immunofluorescence and in vivo experiments were executed to investigate the overexpression of circSMARCA5 with drug sensitivities. Results We found that circRNAs has average higher expression over its host linear genes in peripheral blood. Compared to adjacent normal tissues, circSMARCA5 is decreased in breast cancer tissues, contrary to host gene SMARCA5. The enforced expression of circSMARCA5 induced drug sensitivity of breast cancer cell lines in vitro and in vivo. Furthermore, we demonstrated that circSMARCA5 can bind to its parent gene locus, forming an R-loop, which results in transcriptional pausing at exon 15 of SMARCA5. CircSMARCA5 expression resulted in the downregulation of SMARCA5 and the production of a truncated nonfunctional protein, and the overexpression of circSMARCA5 was sufficient to improve sensitivity to cytotoxic drugs. Conclusion Our results revealed a new regulatory mechanism for circRNA on its host gene and provided evidence that circSMARCA5 may serve as a therapeutic target for drug-resistant breast cancer patients.