BACKGROUND: The condensation of chromosomes and correct sister chromatid segregation during cell division is an essential feature of all proliferative cells. Structural maintenance of chromosomes (SMC) and non-SMC proteins form the condensin I complex and regulate chromosome condensation and segregation during mitosis. However, due to the lack of appropriate mutants, the function of the condensin I complex during vertebrate development has not been described. RESULTS: Here, we report the positional cloning and detailed characterization of retinal phenotypes of a zebrafish mutation at the cap-g locus. High resolution live imaging reveals that the progression of mitosis between prometa- to telophase is delayed and that sister chromatid segregation is impaired upon loss of CAP-G. CAP-G associates with chromosomes between prometa- and telophase of the cell cycle. Loss of the interaction partners CAP-H and CAP-D2 causes cytoplasmic mislocalization of CAP-G throughout mitosis. DNA content analysis reveals increased genomic imbalances upon loss of non-SMC condensin I subunits. Within the retina, loss of condensin I function causes increased rates of apoptosis among cells within the proliferative ciliary marginal zone (CMZ) whereas postmitotic retinal cells are viable. Inhibition of p53-mediated apoptosis partially rescues cell numbers in cap-g mutant retinae and allows normal layering of retinal cell types without alleviating their aberrant nuclear sizes. CONCLUSION: Our findings indicate that the condensin I complex is particularly important within rapidly amplifying progenitor cell populations to ensure faithful chromosome segregation. In contrast, differentiation of postmitotic retinal cells is not impaired upon polyploidization.