The chromosome passenger complex (CPC) controls chromosome congression, kinetochore-microtubule attachments, and spindle checkpoint signaling during mitosis. Aurora-B kinase is the catalytic subunit of the CPC. To understand how a single kinase can regulate such diverse events, we have investigated the activation of Aurora-B and describe two distinct activation mechanisms. First, Aurora-B activation in vitro requires two cofactors, telophase disc-60kD (TD-60) and microtubules. TD-60 is critical to localize both the CPC and Haspin kinase activity to centromeres and thus regulates Aurora-B at several levels. Second, Aurora-B substrates can inhibit kinase activation, and this is relieved by phosphorylation of these substrates by the centromeric kinases Plk1 and Haspin. These regulatory mechanisms suggest models for phosphorylation by Aurora-B of centromeric substrates at unaligned chromosomes and merotelic attachments.