Cohesin is a protein complex originally identified for its role in sister chromatid cohesion, although increasing evidence portrays it also as a major organizer of interphase chromatin. Vertebrate cohesin consists of Smc1, Smc3, Rad21/Scc1 and either stromal antigen 1 (SA1) or SA2. To explore the functional specificity of these two versions of cohesin and their relevance for embryonic development and cancer, we generated a mouse model deficient for SA1. Complete ablation of SA1 results in embryonic lethality, while heterozygous animals have shorter lifespan and earlier onset of tumourigenesis. SA1-null mouse embryonic fibroblasts show decreased proliferation and increased aneuploidy as a result of chromosome segregation defects. These defects are not caused by impaired centromeric cohesion, which depends on cohesin-SA2. Instead, they arise from defective telomere replication, which requires cohesion mediated specifically by cohesin-SA1. We propose a novel mechanism for aneuploidy generation that involves impaired telomere replication upon loss of cohesin-SA1, with clear implications in tumourigenesis.