Large-scale chromatin remodeling during mitosis is catalyzed by a heteropentameric enzyme known as condensin. The DNA-organizing mechanism of condensin depends on the energy of ATP hydrolysis but how this activity specifically promotes proper compaction and segregation of chromosomes during mitosis remains poorly understood. Purification of budding yeast condensin reveals that it occurs not only in the classical heteropentameric "monomer" form, but that it also adopts much larger configurations consistent with oligomerization. We use a single-DNA magnetic tweezers assay to study compaction of DNA by yeast condensin, with the result that only the multimer shows ATP-enhanced DNA-compaction. The compaction reaction involves step-like events of 200 nm (600 bp) size and is strongly suppressed by forces above 1 pN, consistent with a loop-capture mechanism for initial binding and compaction. The compaction reactions are largely insensitive to DNA torsional stress. Our results suggest a physiological role for oligomerized condensin in driving gradual chromatin compaction by step-like and slow "creeping" dynamics consistent with a loop-extrusion mechanism.