Abstract Mitotic entry correlates with the condensation of the chromosomes, remodeling of histone modifications, exclusion of transcription factors from DNA and the broad downregulation of transcription. However, whether mitotic condensation influences transcription in the subsequent interphase is unknown. Here, we show that preventing one chromosome to condense during mitosis causes it to fail resetting transcription. Rather it diverted the transcription machinery and underwent unscheduled initiation of gene expression. This caused the activation of inducible transcriptional programs, such as the GAL genes, even in absence of the relevant stimuli. Strikingly, aberrant gene expression persisted into the next interphase. Thus, our study identifies the maintenance of transcriptional homeostasis as an unexpected and yet unexplored function of mitotic chromosome condensation. One-Sentence Summary Mitotic chromatin condensation resets the transcriptome to protect cells from transcriptional drifting after anaphase.