Inactive centromeres of stable dicentric chromosomes provide a unique opportunity to examine the resolution of sister chromatid cohesion in mitosis. Here we show for the first time that inactive centromeres are composed of heterochromatin, as defined by the presence of heterochromatin protein HP1(Hs alpha). We then show that both the inner centromere protein (INCENP) and its binding partner Aurora-B/AIM-1 kinase can also be detected at the inactive centromere. Thus, targeting of the chromosomal passengers is not dependent upon the presence of an active centromere/kinetochore. Furthermore, we show that the association of INCENP with the inactive centromere correlates strictly with the state of cohesion between sister chromatids: loss of cohesion is accompanied by loss of detectable INCENP. These results are consistent with recent suggestions that one function of the chromosomal passenger proteins may be to regulate sister chromatid separation in mitosis.