Condensins are best known for their role in shaping chromosomes. Other functions such as organizing interphase chromatin and transcriptional control have been reported in yeasts and animals, but little is known about their function in plants. To elucidate the specific composition of condensin complexes and the expression of CAP-D2 (condensin I) and CAP-D3 (condensin II), we performed biochemical analyses in Arabidopsis. The role of CAP-D3 in interphase chromatin organization and function was evaluated using cytogenetic and transcriptome analysis in cap-d3 T-DNA insertion mutants. CAP-D2 and CAP-D3 are highly expressed in mitotically active tissues. In silico and pull-down experiments indicate that both CAP-D proteins interact with the other condensin I and II subunits. In cap-d3 mutants, an association of heterochromatic sequences occurs, but the nuclear size and the general histone and DNA methylation patterns remain unchanged. Also, CAP-D3 influences the expression of genes affecting the response to water, chemicals, and stress. The expression and composition of the condensin complexes in Arabidopsis are similar to those in other higher eukaryotes. We propose a model for the CAP-D3 function during interphase in which CAP-D3 localizes in euchromatin loops to stiffen them and consequently separates centromeric regions and 45S rDNA repeats.