The condensin SMC protein complex organizes chromosomal structure by extruding loops of DNA. Its ATP-dependent motor mechanism remains unclear but likely involves steps associated with large conformational changes within the ~50 nm protein complex. Here, using liquid-phase High-Speed Atomic Force Microscopy (HS AFM) (1) and magnetic tweezers (MT) (2), we obtained experimental evidence that supports a scrunching model for DNA loop extrusion. Condensin cycles dynamically over time between open 'O' shapes and collapsed 'B' shapes, with ATP binding inducing the O to B transition. Condensin binds DNA via its globular domain and, surprisingly, also via the hinge domain. In addition, using high-resolution magnetic tweezers, we show median step sizes are DNA-length dependent, ranging between 100-200 bp at forces of 1.0–0.2 pN, respectively. This demonstrates the important role of the structural flexibility of the unstretched DNA polymer at these low forces. Furthermore, using ATP-binding-impaired and ATP-hydrolysis-deficient mutants, we find that ATP binding is the primary step-generating stage underlying DNA loop extrusion. We discuss the findings in terms of a scrunching model where a stepwise DNA loop extrusion is generated by an ATP-binding-induced engagement of the hinge and the globular domain of the SMC complex.