Sister chromatid cohesion, which is mediated by the cohesin complex, is vital for faithful segregation of chromosomes in mitosis and meiosis (reviewed in). Cohesion is established during S phase, and this process requires the function of the acetyltransferase Eco1/Ctf7. The mechanism of the cohesion establishment is, however, still unclear. Here, we describe isolation and identification of genetic suppressors of budding yeast eco1-1 temperature-sensitive mutant. By using a recently described microarray-based method, we successfully mapped 11 intergenic suppressor mutations in two genes, wpl1 (also known as rad61) and pds5. Pds5 is a known accessory factor of cohesin complex, and we show that Wpl1/Rad61 protein forms a complex with Pds5 and colocalizes with cohesin on chromosomes, as its presumed human homolog Wapl. Impaired function of Wpl1-Pds5 complex makes Eco1 dispensable for cell survival. We also provide evidence that Wpl1 is required for efficient association of cohesin with G2 phase chromosomes and that Eco1 promotes dissociation of Wpl1-Pds5 from cohesin via acetylation of Smc3, a cohesin subunit. Taken together, the presented data suggest that Wpl1-Pds5 complex is inhibitory for cohesion establishment and that Eco1 establishes cohesion by hindering the function of Wpl1-Pds5 temporally in S phase.