Structural maintenance of chromosomes (SMC) proteins interact with DNA in chromosome condensation, sister chromatid cohesion, DNA recombination, and gene dosage compensation. How individual SMC proteins and their functional domains bind DNA has not been described. We demonstrate the ability of the C-terminal domains of Saccharomyces cerevisiae SMC1 and SMC2 proteins, representing two major subfamilies with different functions, to bind DNA in an ATP-independent manner. Three levels of DNA binding specificity were observed: 1) a >100-fold preference for double-stranded versus single-stranded DNA; 2) a high affinity for DNA fragments able to form secondary structures and for synthetic cruciform DNA molecules; and 3) a strong preference for AT-rich DNA fragments of particular types. These include fragments from the scaffold-associated regions, and an alternating poly(dA-dT)-poly(dT-dA) synthetic polymer, as opposed to a variety of other polymers. Reannealing of complementary DNA strands is also promoted primarily by the C-terminal domains. Consistent with their in vitro DNA binding activity, we show that overexpression of the SMC C termini increases plasmid loss without altering viability or cell cycle progression.