The Bub1 and BubR1 kinetochore proteins support proper chromosome segregation and mitotic checkpoint activity. Bub1 and BubR1 are paralogs with Bub1 being a kinase, while BubR1 localizes the PP2A-B56 protein phosphatase to kinetochores in humans. Whether this spatial separation of kinase and phosphatase activity is important is unclear as some organisms integrate both activities into one Bub protein. Here, we engineer human Bub1 and BubR1 proteins integrating kinase and phosphatase activities into one protein and show that these do not support normal mitotic progression. A Bub1–PP2A-B56 complex can support chromosome alignment but results in impairment of the checkpoint due to dephosphorylation of the Mad1 binding site in Bub1. Furthermore, a chimeric BubR1 protein containing the Bub1 kinase domain induces delocalized H2ApT120 phosphorylation, resulting in the reduction of centromeric hSgo2 and chromosome segregation errors. Collectively, these results argue that the spatial separation of kinase and phosphatase activities within the Bub complex is required for balancing its functions in the checkpoint and chromosome alignment.