Aurora-A kinase is necessary for centrosome maturation, for assembly and maintenance of a bipolar spindle, and for proper chromosome segregation during cell division. Aurora-A is an oncogene that is overexpressed in multiple human cancers. Regulation of kinase activity apparently depends on phosphorylation of Thr-288 in the T-loop. In addition, interactions with targeting protein for Xenopus kinesin-like protein 2 (TPX2) allosterically activate Aurora-A. The Thr-288 phosphorylation is reversed by type-1 protein phosphatase (PP1). Mutations in the yeast Aurora, Ipl1, are suppressed by overexpression of Glc8, the yeast homolog of phosphatase inhibitor-2 (I-2). In this study, we show that human I-2 directly and specifically stimulated recombinant human Aurora-A activity in vitro. The I-2 increase in kinase activity was not simply due to inhibition of PP1 because it was not mimicked by other phosphatase inhibitors. Furthermore, activation of Aurora-A was unaffected by deletion of the I-2 N-terminal PP1 binding motif but was eliminated by deletion of the I-2 C-terminal domain. Aurora-A and I-2 were recovered together from mitotic HeLa cells. Kinase activation by I-2 and TPX2 was not additive and occurred without a corresponding increase in T-loop phosphorylation. These results suggest that both I-2 and TPX2 function as allosteric activators of Aurora-A. This implies that I-2 is a bifunctional signaling protein with separate domains to inhibit PP1 and directly stimulate Aurora-A kinase.