Shugoshin-1 (Sgo1) protects the integrity of the centromeres, and H2A phosphorylation is critical for this process. The mitotic checkpoint kinase Bub1, phosphorylates H2A and ensures fidelity of chromosome segregation and chromosome number. Oncogenic KSHV induces genetic alterations through chromosomal instability (CIN), and its essential antigen LANA regulates Bub1. We show that LANA inhibits Bub1 phosphorylation of H2A and Cdc20, important for chromosome segregation and mitotic signaling. Inhibition of H2A phosphorylation at residue T120 by LANA resulted in dislocation of Sgo1, and cohesin from the centromeres. Arrest of Cdc20 phosphorylation also rescued degradation of Securin and Cyclin B1 at mitotic exit, and interaction of H2A, and Cdc20 with Bub1 was inhibited by LANA. The N-terminal nuclear localization sequence domain of LANA was essential for LANA and Bub1 interaction, reversed LANA inhibited phosphorylation of H2A and Cdc20, and attenuated LANA-induced aneuploidy and cell proliferation. This molecular mechanism whereby KSHV-induced CIN, demonstrated that the NNLS of LANA is a promising target for development of anti-viral therapies targeting KSHV associated cancers.