Accurate segregation of the replicated genome requires chromosome biorientation on the spindle. Biorientation is ensured by Aurora B kinase (Ipl1), a member of the four-subunit chromosomal passenger complex (CPC). Localization of the CPC to the inner centromere is central to the current model for how tension ensures chromosome biorientation: kinetochore-spindle attachments that are not under tension remain close to the inner centromere and are destabilized by Aurora B phosphorylation, whereas kinetochores under tension are pulled away from the influence of Aurora B, stabilizing their microtubule attachments. Here we show that an engineered truncation of the Sli15 (known as INCENP in humans) subunit of budding yeast CPC that eliminates association with the inner centromere nevertheless supports proper chromosome segregation during both mitosis and meiosis. Truncated Sli15 suppresses the deletion phenotypes of the inner-centromere-targeting proteins survivin (Bir1), borealin (Nbl1), Bub1 and Sgo1 (ref. 6). Unlike wild-type Sli15, truncated Sli15 localizes to pre-anaphase spindle microtubules. Premature targeting of full-length Sli15 to microtubules by preventing Cdk1 (also known as Cdc28) phosphorylation also suppresses the inviability of Bir1 deletion. These results suggest that activation of Aurora B kinase by clustering either on chromatin or on microtubules is sufficient for chromosome biorientation.