The Cut1 and Cut2 proteins of the fission yeast Schizosaccharomyces pombe form a complex and are required for the separation of sister chromatids during anaphase. Polyubiquitinated Cut2 degrades at the onset of anaphase and this degradation, like that of mitotic cyclin, is dependent on the anaphase-promoting complex/cyclosome. Expression of Cut2 that cannot be degraded blocks sister chromatid separation and anaphase spindle elongation. Here, we have investigated the role of the Cut1-Cut2 interaction in sister chromatid separation. The carboxyl terminus of Cut2 interacts with the amino terminus of Cut1, and temperature-sensitive Cut2 mutants expressed Cut2 proteins that contain substitutions in the carboxyl terminus and fail to interact with Cut1, resulting in aberrant anaphase. Localization of Cut1 alters dramatically during the cell cycle. Cut1 is retained in the cytoplasm during interphase and moves to the mitotic spindle pole bodies and the spindle upon entry into prophase, when spindles are formed. The association between Cut2 and Cut1 is needed for the localization of Cut1 to the spindles, as Cut1 remains unbound to the spindle if complex formation is impaired. Cut2 degrades during anaphase, but Cut1 remains bound to the anaphase spindle. This association with the anaphase spindle requires the conserved carboxyl terminus of Cut1. Complex formation between Cut1 and Cut2 is needed for the onset of normal anaphase. Cut2 is required for loading Cut1 onto the spindle at prophase and Cut2 proteolysis is needed for the active participation of Cut1 in sister chromatid separation.