Structural maintenance of chromosome (SMC) complexes are proteinaceous rings that embrace DNA to enable vital chromosomal functions. The ring is formed by two SMC subunits, closed at a pair of ATPase heads, whose interaction is reinforced by a kleisin subunit. Using biochemical analysis of fission-yeast cohesin, we find that a similar series of events facilitates both topological entrapment and release of DNA. DNA-sensing lysines trigger ATP hydrolysis to open the SMC head interface, whereas the Wapl subunit disengages kleisin, but only after ATP rebinds. This suggests an interlocking gate mechanism for DNA transport both into and out of the cohesin ring. The entry direction is facilitated by a cohesin loader that appears to fold cohesin to expose the DNA sensor. Our results provide a model for dynamic DNA binding by all members of the SMC family and explain how lysine acetylation of cohesin establishes enduring sister chromatid cohesion. 