The small ubiquitin-related modifier (SUMO) system of higher eukaryotes plays important roles in normal cell division, especially in chromosome segregation. However, only a few mitotic SUMO substrates have been identified in mammals. Here, we show that the mitotic kinase Aurora-B can be modified by SUMO. The E3 SUMO-protein ligase PIAS3 [protein inhibitor of activated STAT (signal transducer and activator of transcription)] dramatically enhanced poly-SUMO-2/3 conjugation of Aurora-B, whereas the SUMO-specific isopeptidase SENP2 (Sentrin/SUMO-specific protease) specifically deconjugated SUMO from Aurora-B. The Lys-202 residue on human Aurora-B was preferentially modified by SUMO, and enhancement of SUMOylation in cells facilitated Aurora-B autophosphorylation, which is essential for its activation. Conversely, SENP2-mediated deSUMOylation of Aurora-B down-regulated its autophosphorylation in cells and also impaired its re-activation in Aurora inhibitor VX-680-treated mitotic cells. Poly-SUMO-2 conjugation of Aurora-B occurred during the M phase of the cell cycle, and both SUMO-2 and PIAS3 were localized adjacent to Aurora-B in the kinetochores in early mitosis. Based on these results, we propose that Aurora-B is a novel mitotic SUMO substrate and that its kinase activity is fine-tuned by the SUMO system.