Variability in genome organization drives differential gene expression and shapes cellular diversity. It is unknown whether transcription itself is instructive of genome structural heterogeneity and how it is exploited in disease. We show transcription and cohesin direct the spatial positioning of lamina-associated domain (LAD) boundary genes. Loss of transcription repositions LAD boundary genes to the nuclear lamina. This repositioning is dependent on cohesin loop extrusion activity and cannot be linked to heterochromatin modifiers, compaction status, or disruption of CTCF binding. Pathogenic silencing of the LAD boundary gene FRATAXIN (FXN) in Friedreich’s Ataxia is associated with improper FXN positioning at the lamina. Remarkably, attenuating cohesin activity repositions the mutant FXN away from the nuclear periphery and reactivates FXN transcription. Our data reveal transcription and cohesin loop extrusion, two inherently dynamic processes, direct LAD boundary structural plasticity and spatial positioning and show how the flexible nature of genome structure can be hijacked in disease.