Sister-chromatid bi-orientation on the mitotic spindle is essential for proper chromosome segregation. Defects in bi-orientation are sensed and corrected to prevent chromosome mis-segregation and aneuploidy. This response depends on the adaptor protein Sgo1, which associates with pericentromeric chromatin in mitosis. The mechanisms underlying Sgo1 function and regulation are unclear. Here, we show that Sgo1 is an APC/C substrate in budding yeast, and that its mitotic destruction depends on an unusual D-box-related sequence motif near its C-terminus. We find that the removal of Sgo1 from chromosomes before anaphase is not dependent on its destruction but rather on other mechanisms responsive to tension between sister chromatids. Additionally, we find that Sgo1 recruits protein phosphatase 2A-Rts1 to the pericentromeric region prior to bi-orientation, and that artificial recruitment of Rts1 to this region of a single chromosome is sufficient to perform the function of Sgo1 on that chromosome. We conclude that in early mitosis, Sgo1 associates transiently with pericentromeric chromatin to promote bi-orientation, in large part by recruiting the Rts1 isoform of protein phosphatase 2A.