Cullin–RING E3 ligases (CRLs) control broad range of biological processes by ubiquitinating numerous cellular substrates. However, role of CRL E3 ligases in chromatid cohesion is unknown. In this study, we identified a new CRL type E3 ligase (designated as CRL7^SMU1 complex) that has an essential role in maintenance of chromatid cohesion. We demonstrate that SMU1, DDB1, CUL7 and RNF40 as integral components of this complex. SMU1 by acting as a substrate recognition module, binds to H2B and mediates monoubiquitination at K120 site through CRL7^SMU1 E3 ligase complex. Depletion of CRL7^SMU1leads to loss of H2B ubiquitination at SMC1a locus and thus subsequently compromised SMC1a expression in cells. Knock down of CRL7^SMU1 components or loss of H2B ubiquitination leads to defective sister chromatid cohesion, which is rescued by restoration of SMC1a expression. Together, our results unveil an important role of CRL7^SMU1 E3 ligase in promoting H2B ubiquitination for maintenance of sister chromatid cohesion during mitosis.