Combinatorial modifications of the core histones have the potential to fine-tune the epigenetic regulation of chromatin states. The Aurora B kinase is responsible for generating the double histone H3 modification tri-methylated K9/phosphorylated S10 (H3K9me3/S10ph), which has been implicated in chromosome condensation during mitosis. In this study, we have identified a novel role for Aurora B in epigenetic marking of silent chromatin during cell differentiation. We find that phosphorylation of H3 S10 by Aurora B generates high levels of the double H3K9me3/S10ph modification in differentiated postmitotic cells and also results in delocalisation of HP1beta away from heterochromatin in terminally differentiated plasma cells. Microarray analysis of the H3K9me3/S10ph modification shows a striking increase in the modification across repressed genes during differentiation of mesenchymal stem cells. Our results provide evidence that the Aurora B kinase has a role in marking silent chromatin independently of the cell cycle and suggest that targeting of Aurora B-mediated phosphorylation of H3 S10 to repressed genes could be a mechanism for epigenetic silencing of gene expression.