The budding yeast PLC1 gene encodes a homolog of the delta isoform of mammalian phosphoinositide-specific phospholipase C. Here, we present evidence that Plc1p associates with the kinetochore complex CBF3. This association is mediated through interactions with two established kinetochore proteins, Ndc10p and Cep3p. We show by chromatin immunoprecipitation experiments that Plc1p resides at centromeric loci in vivo. Deletion of PLC1, as well as plc1 mutations which abrogate the interaction of Plc1p with the CBF3 complex, results in a higher frequency of minichromosome loss, nocodazole sensitivity, and mitotic delay. Overexpression of Ndc10p suppresses the nocodazole sensitivity of plc1 mutants, implying that the association of Plc1p with CBF3 is important for optimal kinetochore function. Chromatin extracts from plc1Delta cells exhibit reduced microtubule binding to minichromosomes. These results suggest that Plc1p associates with kinetochores and regulates some aspect of kinetochore function and demonstrate an intranuclear function of phospholipase C in eukaryotic cells.