Activity of separase, a cysteine protease that cleaves sister chromatid cohesin at the onset of anaphase, is tightly regulated to ensure faithful chromosome segregation and genome stability. Two mechanisms negatively regulate separase: inhibition by securin and phosphorylation on serine 1121. To gauge the physiological significance of the inhibitory phosphorylation, we created a mouse strain in which Ser1121 was mutated to Ala (S1121A). Here we report that this S1121A point mutation causes infertility in mice. We show that germ cells in the mutants are depleted during development. We further demonstrate that S1121A causes chromosome misalignment during proliferation of the postmigratory primordial germ cells, resulting in mitotic arrest, aneuploidy, and eventual cell death. Our results indicate that inhibitory phosphorylation of separase plays a critical role in the maintenance of sister chromatid cohesion and genome stability in proliferating postmigratory primordial germ cells.