The gene separation anxiety (san) encodes Naa50/San, a N-terminal acetyltransferase required for chromosome segregation during mitosis. Although highly conserved among higher eukaryotes, the mitotic function of this enzyme is still poorly understood. Naa50/San was originally proposed to be required for centromeric sister chromatid cohesion in Drosophila and human cells, yet, more recently, it was also suggested to be a negative regulator of microtubule polymerization through internal acetylation of beta Tubulin. We used genetic and biochemical approaches to clarify the function of Naa50/San during development. Our work suggests that Naa50/San is required during tissue proliferation for the correct interaction between the cohesin subunits Scc1 and Smc3. Our results also suggest a working model where Naa50/San N-terminally acetylates the nascent Scc1 polypeptide, and that this co-translational modification is subsequently required for the establishment and/or maintenance of sister chromatid cohesion.