Wapl protein regulates binding of the cohesin complex to chromosomes during interphase and helps remove cohesin from chromosomes at mitosis. We isolated a dominant mutation in wapl (waplAG) in a screen for mutations that counteract silencing mediated by an engrailed Polycomb-group response element. waplAG hemizygotes die as pharate adults and have an extra sex combs phenotype characteristic of males with mutations in Polycomb-group (PcG) genes. The wapl gene encodes two proteins, a long form and a short form. waplAG introduces a stop codon at amino acid 271 of the long form and produces a truncated protein. The expression of a transgene encoding the truncated Wapl-AG protein causes an extra-sex-comb phenotype similar to that seen in the waplAG mutant. Mutations in the cohesin-associated genes Nipped-B and pds5 suppress and enhance waplAG phenotypes, respectively. A Pds5-Wapl complex (releasin) removes cohesin from DNA, while Nipped-B loads cohesin. This suggests that Wapl-AG might exert its effects through changes in cohesin binding. Consistent with this model, Wapl-AG was found to increase the stability of cohesin binding to polytene chromosomes. Our data suggest that increasing cohesin stability interferes with PcG silencing at genes that are co-regulated by cohesin and PcG proteins.