Runx transcription factors determine cell fate in many lineages. Maintaining balanced levels of Runx proteins is crucial, as deregulated expression leads to cancers and developmental disorders. We conducted a forward genetic screen in zebrafish for positive regulators of runx1 that yielded the cohesin subunit rad21. Zebrafish embryos lacking Rad21, or cohesin subunit Smc3, fail to express runx3 and lose hematopoietic runx1 expression in early embryonic development. Failure to develop differentiated blood cells in rad21 mutants is partially rescued by microinjection of runx1 mRNA. Significantly, monoallelic loss of rad21 caused a reduction in the transcription of runx1 and of the proneural genes ascl1a and ascl1b, indicating that downstream genes are sensitive to Rad21 dose. Changes in gene expression were observed in a reduced cohesin background in which cell division was able to proceed, indicating that cohesin might have a function in transcription that is separable from its mitotic role. Cohesin is a protein complex essential for sister chromatid cohesion and DNA repair that also appears to be essential for normal development through as yet unknown mechanisms. Our findings provide evidence for a novel role for cohesin in development, and indicate potential for monoallelic loss of cohesin subunits to alter gene expression.