Fission yeast Schizosaccharomyces pombe temperature-sensitive (ts) cut1 mutants fail to separate sister chromatids in anaphase but the cells continue to divide, leading to bisection of the undivided nucleus (the cut phenotype). If cytokinesis is blocked, replication continues, forming a giant nucleus with polyploid chromosomes. We show here that the phenotype of ts cut2-364 is highly similar to that of cut1 and that the functions of the gene products of cut1+ and cut2+ are closely interrelated. The cut1+ and cut2+ genes are essential for viability and interact genetically. Cut1 protein concentrates along the short spindle in metaphase as does Cut2. Cut1 (approximately 200 kDa) and Cut2 (42 kDa) associate, as shown by immunoprecipitation, and co-sediment as large complexes (30 and 40S) in sucrose gradient centrifugation. Their behavior in the cell cycle is strikingly different, however: Cut2 is degraded in anaphase by the same proteolytic machinery used for the destruction of cyclin B, whereas Cut1 exists throughout the cell cycle. The essential function of the Cut1-Cut2 complex which ensures sister chromatid separation may be regulated by Cut2 proteolysis. The C-terminal region of Cut1 is evolutionarily conserved and similar to that of budding yeast Esp1, filamentous fungi BimB and a human protein.