Cell division is finely controlled by various molecules including small G proteins and kinases/phosphatases. Among these, Aurora B, RhoA, and the GAP MgcRacGAP have been implicated in cytokinesis, but their underlying mechanisms of action have remained unclear. Here, we show that MgcRacGAP colocalizes with Aurora B and RhoA, but not Rac1/Cdc42, at the midbody. We also report that Aurora B phosphorylates MgcRacGAP on serine residues and that this modification induces latent GAP activity toward RhoA in vitro. Expression of a kinase-defective mutant of Aurora B disrupts cytokinesis and inhibits phosphorylation of MgcRacGAP at Ser387, but not its localization to the midbody. Overexpression of a phosphorylation-deficient MgcRacGAP-S387A mutant, but not phosphorylation-mimic MgcRacGAP-S387D mutant, arrests cytokinesis at a late stage and induces polyploidy. Together, these findings indicate that during cytokinesis, MgcRacGAP, previously known as a GAP for Rac/Cdc42, is functionally converted to a RhoGAP through phosphorylation by Aurora B.