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Transient DNA loops occur throughout the genome due to thermal fluctuations of DNA and the function of SMC complex proteins such as condensin and cohesin. Transient crosslinking within and between chromosomes and loop extrusion by SMCs have profound effects on high-order chromatin organization and exhibit specificity in cell type, cell cycle stage, and cellular environment. SMC complexes anchor one end to DNA with the other extending some distance and retracting to form a loop. How cells regulate loop sizes and how loops distribute along chromatin are emerging questions. To understand loop size regulation, we employed bead–spring polymer chain models of chromatin and the activity of an SMC complex on chromatin. Our study shows that (1) the stiffness of the chromatin polymer chain, (2) the tensile stiffness of chromatin crosslinking complexes such as condensin, and (3) the strength of the internal or external tethering of chromatin chains cooperatively dictate the loop size distribution and compaction volume of induced chromatin domains. When strong DNA tethers are invoked, loop size distributions are tuned by condensin stiffness. When DNA tethers are released, loop size distributions are tuned by chromatin stiffness. In this three-way interaction, the presence and strength of tethering unexpectedly dictates chromatin conformation within a topological domain.