In vertebrates, condensin I and condensin II cooperate to assemble rod-shaped chromosomes during mitosis. Despite recent progress in our understanding of the mechanism of action of condensin I, how condensin II might work has remained largely unexplored. By introducing recombinant condensin II complexes into Xenopus egg extracts, we dissect the roles of its individual subunits in chromosome assembly. We show that two HEAT subunits, CAP-D3 and CAP-G2, play positive and negative roles, respectively, in condensin II-mediated chromosome assembly. The SMC ATPase and the basic amino acid clusters of the kleisin subunit are essential for this process. Deletion of the C-terminal tail of CAP-D3 increases the ability of condensin II to assemble chromosomes and further exposes a hidden function of CAP-G2 in the lateral compaction of chromosomes. Taken together, our results uncover a multilayered regulatory mechanism unique to condensin II, and provide profound implications in the evolution of condensin II.