The segregation of centromeres and telomeres at mitosis is coordinated at multiple levels to prevent the formation of aneuploid cells, a phenotype frequently observed in cancer. Mitotic instability arises from chromosome segregation defects, giving rise to chromatin bridges at anaphase. Most of these defects are corrected before anaphase onset by a mechanism involving Aurora B kinase, a key regulator of mitosis in a wide range of organisms. Here, we describe a new role for Aurora B in telomere dispersion and disjunction during fission yeast mitosis. Telomere dispersion initiates in metaphase, whereas disjunction takes place in anaphase. Dispersion is promoted by the dissociation of Swi6/HP1 and cohesin Rad21 from telomeres, whereas disjunction occurs at anaphase after the phosphorylation of condensin subunit Cnd2. Strikingly, we demonstrate that deletion of Ccq1, a telomeric shelterin component, rescued cell death after Aurora inhibition by promoting the loading of condensin on chromosome arms. Our findings reveal an essential role for telomeres in chromosome arm segregation. 