To maintain phenotypes of cell lineages, cells must 'remember' which genes were active before mitosis entry and transmit this information to their daughter cells so that expression patterns can be faithfully re-established in G1. This phenomenon is called gene bookmarking. However, during mitosis transcription ceases, most sequence-specific proteins dissociate from DNA and the chromatin is tightly compacted, making it difficult to understand how gene activity 'memory' is maintained through this stage of the cell cycle. A feature of gene bookmarking is that in mitotic cells, the promoters of formerly active genes lack compaction, but how compaction of these regions is inhibited is unknown. Here we show that during mitosis, TATA-binding protein (TBP), which remains bound to DNA during mitosis, recruits PP2A. TBP also interacts with condensin to allow efficient dephosphorylation and inactivation of condensin near these promoters to inhibit their compaction. Further, ChIP-on-chip data show that TBP is bound to many chromosomal sites during mitosis, and is higher in transcribed regions but low in regions containing pseudogenes and genes whose expression is tissue-restricted. These results suggest that TBP is involved not only in gene transcription during interphase but also in preserving the memory of gene activity through mitosis to daughter cells.