Defining the mechanisms of chromosomal cohesion and dissolution of the cohesin complex from chromatids is important for understanding the chromosomal missegregation seen in many tumor cells. Here we report the identification of a novel cohesin-resolving protease and describe its role in chromosomal segregation. Sister chromatids are held together by cohesin, a multiprotein ring-like complex comprised of Rad21, Smc1, Smc3, and SA2 (or SA1). Cohesin is known to be removed from vertebrate chromosomes by two distinct mechanisms, namely, the prophase and anaphase pathways. First, PLK1-mediated phosphorylation of SA2 in prophase leads to release of cohesin from chromosome arms, leaving behind centromeric cohesins that continue to hold the sisters together. Then, at the onset of anaphase, activated separase cleaves the centromeric cohesin Rad21, thereby opening the cohesin ring and allowing the sister chromatids to separate. We report here that the calcium-dependent cysteine endopeptidase calpain-1 is a Rad21 peptidase and normally localizes to the interphase nuclei and chromatin. Calpain-1 cleaves Rad21 at L192, in a calcium-dependent manner. We further show that Rad21 cleavage by calpain-1 promotes separation of chromosome arms, which coincides with a calcium-induced partial loss of cohesin at several chromosomal loci. Engineered cleavage of Rad21 at the calpain-cleavable site without activation of calpain-1 can lead to a loss of sister chromatid cohesion. Collectively, our work reveals a novel function of calpain-1 and describes an additional pathway for sister chromatid separation in humans.