Glycyrrhizic acid (GA), a derivative of licorice, selectively inhibits the growth of lymphocytes latently infected with Kaposi's sarcoma-associated herpesvirus. The mechanism involves the deregulation of the multicistronic latency transcript, including the failure to generate the mature forms of viral mRNA encoding LANA. We show here that GA disrupts an RNA polymerase II (RNAPII) complex that accumulates at the CTCF-cohesin binding site within the first intron of the latency transcript. GA altered the enrichment of the RNAPII pausing complex, along with pausing factors SPT5 and NELF-A, at the intragenic CTCF-cohesin binding sites. GA blocked the interaction of cohesin subunit SMC3 with another cohesin subunit, RAD21, and reduced SPT5 interaction with RNAPII. Covalent coupling of GA to a solid support revealed that GA interacts with several cellular proteins, including SMC3 and SPT5, but not their respective interaction partners RAD21 and RNAPII. GA treatment also inhibited the transcription of some cellular genes, like c-myc, which contain a similar CTCF-cohesin binding site within the first intron. We also found that GA leads to a more general loss of sister chromatid cohesion for cellular chromosomes. These findings suggest that RNAPII pauses at intragenic CTCF-cohesin binding sites and that abrogation of this pausing by GA leads to loss of proper mRNA production and defects in sister chromatid cohesion, a process important for both viral and cellular chromosome stability.