Condensin complexes play vital roles in chromosome condensation during mitosis and meiosis. Condensin II uniquely localizes to chromatin throughout the cell cycle and, in addition to its mitotic duties, modulates chromosome organization and gene expression during interphase. Mitotic condensin activity is regulated by phosphorylation, but mechanisms that regulate condensin II during interphase are unclear. Here, we report that condensin II is inactivated when its subunit Cap-H2 is targeted for degradation by the SCF(Slimb) ubiquitin ligase complex and that disruption of this process dramatically changed interphase chromatin organization. Inhibition of SCF(Slimb) function reorganized interphase chromosomes into dense, compact domains and disrupted homologue pairing in both cultured Drosophila cells and in vivo, but these effects were rescued by condensin II inactivation. Furthermore, Cap-H2 stabilization distorted nuclear envelopes and dispersed Cid/CENP-A on interphase chromosomes. Therefore, SCF(Slimb)-mediated down-regulation of condensin II is required to maintain proper organization and morphology of the interphase nucleus.