Chromosomal instability (CIN), a major hallmark of cancer, can be driven by defects in the integrity of centromere or kinetochore structure. Coordinated control of phosphorylation and dephosphorylation activities during cell division is critical to ensure chromosomal stability. Overexpression of the centromeric histone H3 variant CENP-A is observed in many cancers, and its mislocalization to noncentromeric regions promotes CIN. We identified protein phosphatase 1 (PP1) nuclear targeting subunit (PNUTS) as a top candidate in a genome-wide siRNA screen for gene depletions that lead to increased nuclear CENP-A levels. Here, we define a role for PNUTS in preventing CENP-A mislocalization and CIN. Depletion of PNUTS resulted in high nuclear CENP-A levels throughout the cell cycle in a PP1-dependent manner. Consistent with these results, mislocalization of CENP-A and its interacting partner CENP-C were observed on mitotic chromosomes from PNUTS-depleted cells. Defects in kinetochore integrity and CIN phenotypes were also observed in PNUTS-depleted cells. Mechanistically, we show that depletion of the histone H3.3 chaperone DAXX suppresses the mislocalization of CENP-A and micronuclei incidence in PNUTS-depleted cells. In summary, our studies highlight the importance of phospho-regulation mediated by PNUTS in preventing CENP-A mislocalization and CIN.