During mitosis, genomic integrity is maintained by the proper coordination of mitotic events through the spindle checkpoint. The bifurcated spindle checkpoint blocks cell cycle progression at metaphase by monitoring unattached kinetochores and inhibits mitotic exit in response to the incorrect orientation of the mitotic spindle. Bfa1p is a spindle checkpoint regulator of budding yeast in the Bub2p checkpoint pathway for proper mitotic exit. We have isolated a novel Bfa1p interacting protein named Ibd2p in the budding yeast Saccharomyces cerevisiae. We found that IBD2 (Inhibition of Bud Division 2) is not an essential gene but its deletion mutant proceeded through the cell cycle in the presence of microtubule-destabilizing drugs, thereby inducing a sharp decrease in viability. In addition, overexpression of Mps1p caused partial mitotic arrest in ibd2Delta as well as in bub2Delta, suggesting that IBD2 encodes a novel component of the spindle checkpoint downstream of MPS1. Overexpression of Ibd2p induced mitotic arrest with increased levels of Clb2p in wild type and mad2Delta, but not in deletion mutants of BUB2 and BFA1. Pds1p was also stabilized by the overexpression of Ibd2p in wild-type cells. The mitotic arrest defects observed in ibd2Delta in the presence of nocodazole were restored by additional copies of BUB2, BFA1, and CDC5, whereas an extra copy of IBD2 could not rescue the mitotic arrest defects of bub2Delta and bfa1Delta. The mitotic arrest defects of ibd2Delta were not recovered by MAD2, or vice versa. Analysis of the double mutant combinations ibd2Deltamad2Delta, ibd2Deltabub2Delta, and ibd2Deltadyn1Delta showed that IBD2 belongs to the BUB2 epistasis group. Taken together, these data demonstrate that IBD2 encodes a novel component of the BUB2-dependent spindle checkpoint pathway that functions upstream of BUB2 and BFA1.