Loss of heterozygosity (LOH) is an important factor in cancer, pathogenic fungi, and adaptation to changing environments. The sister chromatid cohesion process (SCC) suppresses aneuploidy and therefore whole chromosome LOH. SCC is also important to channel recombinational repair to sister chromatids, thereby preventing LOH mediated by allelic recombination. There is, however, insufficient information about the relative roles that the SCC pathway plays in the different modes of LOH. Here, we found that the cohesin mutation mcd1-1, and other mutations in SCC, differentially affect the various types of LOH. The greatest effect, by three orders of magnitude, was on whole chromosome loss (CL). In contrast, there was little increase in recombination-mediated LOH, even for telomeric markers. Some of the LOH events that were increased by SCC mutations were complex, i.e., they were the result of several chromosome transactions. Although these events were independent of POL32, the most parsimonious way to explain the formation of at least some of them was break-induced replication through the centromere. Interestingly, the mcd1-1 pol32Δ double mutant showed a significant reduction in the rate of CL in comparison with the mcd1-1 single mutant. Our results show that defects in SCC allow the formation of complex LOH events that, in turn, can promote drug or pesticide resistance in diploid microbes that are pathogenic to humans or plants.