Aneuploidy is a key process in tumorigenesis. Dysfunction of the mitotic spindle checkpoint proteins has been implicated as a cause of aneuploidy in cells. We have previously reported that FAT10, a member of the ubiquitin-like modifier family of proteins, is overexpressed in several gastrointestinal and gynecological cancers. Here we show that FAT10 interacts with MAD2, a spindle checkpoint protein, during mitosis. Notably, we show that localization of MAD2 at the kinetochore during the prometaphase stage of the cell cycle was greatly reduced in FAT10-overexpressing cells. Furthermore, compared with parental HCT116 cells, fewer mitotic cells were observed after double thymidine-synchronized FAT10-overexpressing cells were released into nocodazole for more than 4 h. Nonetheless, when these double thymidine-treated cells were released into media, a similar number of G1 parental and FAT10-overexpressing HCT116 cells was observed throughout the 10-h time course. Additionally, more nocodazole-treated FAT10-overexpressing cells escape mitotic controls and are multinucleate compared with parental cells. Significantly, we observed a higher degree of variability in chromosome number in cells overexpressing FAT10. Hence, our data suggest that high levels of FAT10 protein in cells lead to increased mitotic nondisjunction and chromosome instability, and this effect is mediated by an abbreviated mitotic phase and the reduction in the kinetochore localization of MAD2 during the prometaphase stage of the cell cycle.