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The cohesin complex spatially organizes interphase chromatin by bringing distal genomic loci into close physical proximity, looping out the intervening DNA. Mutation of cohesin complex subunits is observed in cancer and developmental disorders, but the mechanisms through which these mutations may contribute to disease remain poorly understood. Here, we investigate a recurrent missense mutation to the hinge domain of the cohesin subunit SMC1A, observed in acute myeloid leukemia. Engineering this mutation into murine embryonic stem cells caused widespread changes in gene expression, including dysregulation of the pluripotency gene expression program. This mutation reduced cohesin levels at promoters and enhancers, decreased DNA loops and interactions across short genomic distances, and weakened insulation at CTCF-mediated DNA loops. These findings provide insight into how altered cohesin function contributes to disease and identify a requirement for the cohesin hinge domain in three-dimensional chromatin structure. Author summary: Mammalian genomes consist of multiple meters of DNA which must be highly folded in order to fit inside of the nucleus. This folding is regulated at multiple scales by different biological mechanisms. The spatial organization of the genome is closely linked to its function, including the spatial and temporal expression of genes. Especially important for gene control is the partitioning of chromosomes into DNA loops, which are formed when two distal loci are brought into close contact. The folding of the genome into DNA loops is performed by cohesin and CTCF. The molecular basis for how DNA loops dynamically form and function in gene control is poorly understood. Here, we investigate a recurrent cancer mutation in cohesin and show that it causes altered folding of the genome into DNA loops and misexpression of many genes. This finding is important because cohesin mutations are common in many cancers and yet there is little understanding of how cohesin defects may contribute to disease. [ABSTRACT FROM AUTHOR]