The circular Escherichia coli chromosome is organized by bidirectional replication into two equal left and right arms (replichores). Each arm occupies a separate cell half, with the origin of replication (oriC) at mid-cell. E. coli MukBEF belongs to the ubiquitous family of SMC protein complexes that play key roles in chromosome organization and processing. In mukBEF mutants, viability is restricted to low temperature with production of anucleate cells, reflecting chromosome segregation defects. We show that in mukB mutant cells, the two chromosome arms do not separate into distinct cell halves, but extend from pole to pole with the oriC region located at the old pole. Mutations in topA, encoding topoisomerase I, do not suppress the aberrant positioning of chromosomal loci in mukB cells, despite suppressing the temperature-sensitivity and production of anucleate cells. Furthermore, we show that MukB and the oriC region generally colocalize throughout the cell cycle, even when oriC localization is aberrant. We propose that MukBEF initiates the normal bidirectional organization of the chromosome from the oriC region.