Cohesin is a toroidal-shaped protein complex that binds chromatin by encircling either one or two DNA duplexes. The complex joins distant DNA sites together to mediate sister chromatid cohesion, double-strand break repair and the regulation of gene expression. In yeast, cohesin often associates with the bodies of inactive genes. However, transcriptional activation mobilizes the complex, causing loss from gene bodies and a corresponding increase in binding at intergenic regions between convergently oriented genes. It is not clear whether cohesin mobilization occurs by sliding complexes along DNA or by displacing complexes from DNA entirely. Here, URA3 was used as a model system to study how cohesin arrives at a eukaryotic gene and what happens to the complex when transcription ensues. Site-specific recombination was used to excise a pair of DNA circles from sister chromatids that cohesed when URA3 was present on the circles. Deletion analysis identified a region of the URA3 promoter that included a poly(dA-dT) segment that was required for cohesion. The cohesin loading complex Scc2/4 is known to bind poly(dA-dT) regions, suggesting that this URA3 promoter element may be a loading site for cohesin that accumulates on the gene. The DNA circle assay was also used to study how cohesive complexes are mobilized by transcription. Induction of transcription after circularization did not diminish cohesion. However, induction of transcription before circularization (when the template was effectively linear) caused loss of cohesion. Insertion of a convergent gene downstream of URA3 prevented transcription-driven loss of cohesion. Collectively, these data are consistent with transcription mobilizing cohesin complexes by sliding along DNA.