Molecular motors play critical roles in the formation of mitotic spindles, either through controlling the stability of individual microtubules, or by crosslinking and sliding microtubule arrays. Kinesin-8 motors are best known for their regulatory roles in controlling microtubule dynamics. They contain microtubule-destabilizing activities, and restrict spindle length in a wide variety of cell types and organisms. Here, we report an antiparallel microtubule-sliding activity of the budding yeast kinesin-8, Kip3. The in vivo importance of this sliding activity was established through the identification of complementary Kip3 mutants that separate the sliding activity and microtubule-destabilizing activity. In conjunction with Cin8, a kinesin-5 family member, the sliding activity of Kip3 promotes bipolar spindle assembly and the maintenance of genome stability. We propose a slide-disassemble model where the sliding and destabilizing activity of Kip3 balance during pre-anaphase. This facilitates normal spindle assembly. However, the destabilizing activity of Kip3 dominates in late anaphase, inhibiting spindle elongation and ultimately promoting spindle disassembly.