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The core cohesin subunit STAG2 is recurrently mutated in Ewing sarcoma but its biological role is less clear. Here, we demonstrate that cohesin complexes containing STAG2 occupy enhancer and polycomb repressive complex (PRC2)-marked regulatory regions. Genetic suppression of STAG2 leads to a compensatory increase in cohesin-STAG1 complexes, but not in enhancer-rich regions, and results in reprogramming of cis-chromatin interactions. Strikingly, in STAG2 knockout cells the oncogenic genetic program driven by the fusion transcription factor EWS/FLI1 was highly perturbed, in part due to altered enhancer-promoter contacts. Moreover, loss of STAG2 also disrupted PRC2-mediated regulation of gene expression. Combined, these transcriptional changes converged to modulate EWS/FLI1, migratory, and neurodevelopmental programs. Finally, consistent with clinical observations, functional studies revealed that loss of STAG2 enhances the metastatic potential of Ewing sarcoma xenografts. Our findings demonstrate that STAG2 mutations can alter chromatin architecture and transcriptional programs to promote an aggressive cancer phenotype.