Aurora B kinase is essential for successful cell division and regulates spindle assembly and kinetochore-microtubule interactions. The kinase localizes to the inner centromere until anaphase, but many of its substrates have distinct localizations, for example on chromosome arms and at kinetochores. Furthermore, substrate phosphorylation depends on distance from the kinase. How the kinase reaches substrates at a distance and how spatial phosphorylation patterns are determined are unknown. In this paper, we show that a phosphorylation gradient is produced by Aurora B concentration and activation at centromeres and release and diffusion to reach substrates at a distance. Kinase concentration, either at centromeres or at another chromosomal site, is necessary for activity globally. By experimentally manipulating dynamic exchange at centromeres, we demonstrate that the kinase reaches its substrates by diffusion. We also directly observe, using a fluorescence resonance energy transfer-based biosensor, phosphorylation spreading from centromeres after kinase activation. We propose that Aurora B dynamics and diffusion from the inner centromere create spatial information to regulate cell division.