The centromeric histone H3 variant (CenH3) is essential for chromosome segregation in eukaryotes. We have identified posttranslational modifications of S. cerevisiae CenH3, Cse4. Functional characterization of cse4 phosphorylation mutants showed growth and chromosome segregation defects when combined with kinetochore mutants okp1 and ame1. Using a phosphoserine-specific antibody we showed that the association of phosphorylated Cse4 with centromeres is increased in response to defective microtubule attachment or reduced cohesion. We determined that evolutionarily conserved Ipl1/Aurora B contributes to phosphorylation of Cse4, as levels of phosphorylated Cse4 were reduced at centromeres in ipl1 strains in vivo and in vitro assays showed phosphorylation of Cse4 by Ipl1. Consistent with these results we observed that a phosphomimetic cse4-4SD mutant suppressed the temperature sensitive growth of ipl1-2 and Ipl1 substrate mutants dam1 spc34 and ndc80 that are defective for chromosome biorientation. Furthermore, cell biology approaches using a GFP labeled chromosome showed that cse4-4SD suppressed chromosome segregation defects in dam1 spc34 strains. Based these results we propose that phosphorylation of Cse4 destabilizes defective kinetochores to promote biorientation and ensure faithful chromosome segregation. Taken together, our study provides a detailed analysis, in vivo and in vitro, of Cse4 phosphorylation and its role in promoting faithful chromosome segregation.