The essential process of dosage compensation equalizes X-chromosome gene expression between Caenorhabditis elegans XO males and XX hermaphrodites through a dosage compensation complex (DCC) that is homologous to condensin. The DCC binds to both X chromosomes of hermaphrodites to repress transcription by half. Here, we show that posttranslational modification by the SUMO (small ubiquitin-like modifier) conjugation pathway is essential for sex-specific assembly and function of the DCC on X. Depletion of SUMO in vivo severely disrupts binding of particular DCC subunits and causes changes in X-linked gene expression similar to those caused by deleting genes encoding DCC subunits. Three DCC subunits are SUMOylated, and SUMO depletion preferentially reduces their binding to X, suggesting that SUMOylation of DCC subunits is essential for robust association with X. DCC SUMOylation is triggered by the signal that initiates DCC assembly onto X. The initial step of assembly-binding of X-targeting factors to recruitment sites on X-is independent of SUMOylation, but robust binding of the complete complex requires SUMOylation. SUMOylated DCC subunits are enriched at recruitment sites, and SUMOylation likely enhances interactions between X-targeting factors and condensin subunits that facilitate DCC binding beyond the low level achieved without SUMOylation. DCC subunits also participate in condensin complexes essential for chromosome segregation, but their SUMOylation occurs only in the context of the DCC. Our results reinforce a newly emerging theme in which multiple proteins of a complex are collectively SUMOylated in response to a specific stimulus, leading to accelerated complex formation and enhanced function.