Chromosome segregation during mitosis requires kinetochores, specialized organelles that mediate chromosome attachment to spindle microtubules. We have shown previously that in budding yeast, Plc1p (phosphoinositide-specific phospholipase C) localizes to centromeric loci, associates with the kinetochore proteins Ndc10p and Cep3p, and affects the function of kinetochores. Deletion of PLC1 results in nocodazole sensitivity, mitotic delay, and a higher frequency of chromosome loss. We report here that despite the nocodazole sensitivity of plc1Delta cells, Plc1p is not required for the spindle checkpoint. However, plc1Delta cells require a functional BUB1/BUB3-dependent spindle checkpoint for viability. PLC1 displays strong genetic interactions with genes encoding components of the inner kinetochore, including NDC10, SKP1, MIF2, CEP1, CEP3, and CTF13. Furthermore, plc1Delta cells display alterations in chromatin structure in the core centromere. Chromatin immunoprecipitation experiments indicate that Plc1p localizes to centromeric loci independently of microtubules, and accumulates at the centromeres during G(2)/M stage of cell cycle. These results are consistent with the view that Plc1p affects kinetochore function, possibly by modulating the structure of centromeric chromatin.