Cohesin complexes mediate sister-chromatid cohesion in dividing cells but may also contribute to gene regulation in postmitotic cells. How cohesin regulates gene expression is not known. Here we describe cohesin-binding sites in the human genome and show that most of these are associated with the CCCTC-binding factor (CTCF), a zinc-finger protein required for transcriptional insulation. CTCF is dispensable for cohesin loading onto DNA, but is needed to enrich cohesin at specific binding sites. Cohesin enables CTCF to insulate promoters from distant enhancers and controls transcription at the H19/IGF2 (insulin-like growth factor 2) locus. This role of cohesin seems to be independent of its role in cohesion. We propose that cohesin functions as a transcriptional insulator, and speculate that subtle deficiencies in this function contribute to ‘cohesinopathies’ such as Cornelia de Lange syndrome.