Folding of the chromosomal fibre in interphase nuclei is an important element in the regulation of gene expression. For instance, physical contacts between promoters and enhancers are a key element in cell-type-specific transcription. We know remarkably little about the principles that control chromosome folding. Here we explore the view that intrachromosomal interactions, forming a complex pattern of loops, are a key element in chromosome folding. CTCF and cohesin are two abundant looping proteins of interphase chromosomes of higher eukaryotes. To investigate the role of looping in large-scale (supra Mb) folding of human chromosomes, we knocked down the gene that codes for CTCF and the one coding for Rad21, an essential subunit of cohesin. We measured the effect on chromosome folding using systematic 3D fluorescent in situ hybridization (FISH). Results show that chromatin becomes more compact after reducing the concentration of these two looping proteins. The molecular basis for this counter-intuitive behaviour is explored by polymer modelling usingy the Dynamic Loop model (Bohn M, Heermann DW (2010) Diffusion-driven looping provides a consistent framework for chromatin organization. PLoS ONE 5: e12218.). We show that compaction can be explained by selectively decreasing the number of short-range loops, leaving long-range looping unchanged. In support of this model prediction it has recently been shown by others that CTCF and cohesin indeed are responsible primarily for short-range looping. Our results suggest that the local and the overall changes in of chromosome structure are controlled by a delicate balance between short-range and long-range loops, allowing easy switching between, for instance, open and more compact chromatin states. 