DNA replication generates sister chromatid pairs that are bound to one another until anaphase onset. The process, termed sister chromatid cohesion, requires the multisubunit cohesin complex that resides at centromeres and sites where genes converge. At the HMR mating-type locus of budding yeast, cohesin associates with a heterochromatin-like structure known as silent chromatin. In this report, we show that silent chromatin is necessary but not sufficient for cohesion of the replicating locus. A tRNA gene (tDNA) that delimits the silent chromatin domain is also required, as are subunits of the TFIIIB and RSC complexes that bind the gene. Non-tDNA boundary elements do not substitute for tDNAs in cohesion, suggesting that barrier activity is not responsible for the phenomenon. The results reveal an unexpected role for tDNAs and RNA polymerase III-associated proteins in establishment of sister chromatid cohesion.