Functional links connecting gene transcription and condensin-mediated chromosome 
condensation have been established in species ranging from prokaryotes to 
vertebrates. However, the exact nature of these links remains misunderstood. 
Here we show in fission yeast that the 3' end RNA processing factor Swd2.2, a 
component of the Cleavage and Polyadenylation Factor (CPF), is a negative 
regulator of condensin-mediated chromosome condensation. Lack of Swd2.2 does not 
affect the assembly of the CPF but reduces its association with chromatin. This 
causes only limited, context-dependent effects on gene expression and 
transcription termination. However, CPF-associated Swd2.2 is required for the 
association of Protein Phosphatase 1 PP1(Dis2) with chromatin, through an 
interaction with Ppn1, a protein that we identify as the fission yeast homologue 
of vertebrate PNUTS. We demonstrate that Swd2.2, Ppn1 and PP1Dis2 form an 
independent module within the CPF, which provides an essential function in the 
absence of the CPF-associated Ssu72 phosphatase. We show that Ppn1 and Ssu72, 
like Swd2.2, are also negative regulators of condensin-mediated chromosome 
condensation. We conclude that Swd2.2 opposes condensin-mediated chromosome 
condensation by facilitating the function of the two CPF-associated phosphatases 
PP1 and Ssu72.