Cohesin is well known as the protein complex that holds sister chromatids together after replication so that they are not prematurely separated before mitosis. More recent data suggested that cohesin also has a cell-division-independent function, the loss of which can lead to disease. Matthias Merkenschlager and colleagues report that in mouse thymocytes, cohesin is required for long-range interactions that underlie several events leading to T-cell receptor rearrangement and thymocyte differentiation. Cohesin enables post-replicative DNA repair and chromosome segregation by holding sister chromatids together from the time of DNA replication in S phase until mitosis1. There is growing evidence that cohesin also forms long-range chromosomal cis-interactions2,3,4 and may regulate gene expression2,3,4,5,6,7,8,9,10 in association with CTCF8,9, mediator4 or tissue-specific transcription factors10. Human cohesinopathies such as Cornelia de Lange syndrome are thought to result from impaired non-canonical cohesin functions7, but a clear distinction between the cell-division-related and cell-division-independent functions of cohesion—as exemplified in Drosophila11,12,13—has not been demonstrated in vertebrate systems. To address this, here we deleted the cohesin locus Rad21 in mouse thymocytes at a time in development when these cells stop cycling and rearrange their T-cell receptor (TCR) α locus (Tcra). Rad21-deficient thymocytes had a normal lifespan and retained the ability to differentiate, albeit with reduced efficiency. Loss of Rad21 led to defective chromatin architecture at the Tcra locus, where cohesion-binding sites flank the TEA promoter and the Eα enhancer, and demarcate Tcra from interspersed Tcrd elements and neighbouring housekeeping genes. Cohesin was required for long-range promoter–enhancer interactions, Tcra transcription, H3K4me3 histone modifications that recruit the recombination machinery14,15 and Tcra rearrangement. Provision of pre-rearranged TCR transgenes largely rescued thymocyte differentiation, demonstrating that among thousands of potential target genes across the genome4,8,9,10, defective Tcra rearrangement was limiting for the differentiation of cohesin-deficient thymocytes. These findings firmly establish a cell-division-independent role for cohesin in Tcra locus rearrangement and provide a comprehensive account of the mechanisms by which cohesin enables cellular differentiation in a well-characterized mammalian system.