The inner centromere-like protein ( INCENP) forms a complex with the evolutionarily conserved family of Aurora B kinases. The INCENP-Aurora complex helps coordinate chromosome segregation, spindle behavior, and cytokinesis during mitosis. INCENP-Aurora associates with kinetochores in metaphase and with spindle microtubules in anaphase, yet the trigger for this abrupt transfer is unknown. Here we show that the conserved phosphatase Cdc14 regulated the yeast INCENP-Aurora complex, Sli15-Ipl1. Cdc14 dephosphorylated Sli15 and thereby directed the complex to spindles. Activation of Cdc14 by separase was sufficient for Sli15 dephosphorylation and relocalization. Cdc14 not only regulates mitotic exit but also modulates spindle midzone assembly through Sli15-Ipl1.