The bacterial SMC (structural maintenance of chromosomes) complex binds nonspecifically to DNA in vitro and forms two discrete subcellular centers in vivo, one in each cell half. How this distribution is maintained is unclear. We show by time-lapse imaging of single molecules that the localization is achieved through limited, yet rapid movement of the SMC subunits through the nucleoid. Accessory ScpAB subunits mediate the arrest of 20% of SMC molecules at the center of a cell half and do not move together with the 80% mobile SMC molecules. Only free SMC, but not the preformed SMC/ScpAB complex, was able to bind to DNA in vitro, revealing distinct functions of SMC fractions. Thus, whereas SMC alone dynamically interacts with many sites on the chromosome, it forms static assemblies together with ScpAB complex partners. Our findings reveal two distinct modes of interaction of SMC with the chromosome and indicate that limited diffusion within a confined space and transient arrest may be a general mechanism for positioning proteins within a chromosome and within a noncompartmentalized cell.