Pds5p and the cohesin complex are required for sister chromatid cohesion and localize to the same chromosomal loci over the same cell cycle window. However, Pds5p and the cohesin complex likely have distinct roles in cohesion. We report that pds5 mutants establish cohesion, but during mitosis exhibit precocious sister dissociation. Thus, unlike the cohesin complex, which is required for cohesion establishment and maintenance, Pds5p is required only for maintenance. We identified SMT4, which encodes a SUMO isopeptidase, as a high copy suppressor of both the temperature sensitivity and precocious sister dissociation of pds5 mutants. In contrast, SMT4 does not suppress temperature sensitivity of cohesin complex mutants. Pds5p is SUMO conjugated, with sumoylation peaking during mitosis. SMT4 overexpression reduces Pds5p sumoylation, whereas smt4 mutants have increased Pds5p sumoylation. smt4 mutants were previously shown to be defective in cohesion maintenance during mitosis. These data provide the first link between a protein required for cohesion, Pds5p, and sumoylation, and suggest that Pds5p sumoylation promotes the dissolution of cohesion.