Chromosomal instability (CIN) is a hallmark of many cancers and a major contributor to tumorigenesis. Centromere and kinetochore associated proteins such as the evolutionarily conserved centromeric histone H3 variant CENP-A, associate with centromeric DNA for centromere function and chromosomal stability. Stringent regulation of cellular CENP-A levels prevents its mislocalization in yeast and flies to maintain genome stability. CENP-A overexpression and mislocalization are observed in several cancers and reported to be associated with increased invasiveness and poor prognosis. We examined whether there is a direct relationship between mislocalization of overexpressed CENP-A and CIN using HeLa and chromosomally stable diploid RPE1 cell lines as model systems. Our results show that mislocalization of overexpressed CENP-A to chromosome arms leads to chromosome congression defects, lagging chromosomes, micronuclei formation and a delay in mitotic exit. CENP-A overexpressing cells showed altered localization of centromere and kinetochore associated proteins such as CENP-C, CENP-T and Nuf2 leading to weakened native kinetochores as shown by reduced interkinetochore distance and CIN. Importantly, our results show that mislocalization of CENP-A to chromosome arms is one of the major contributors for CIN as depletion of histone chaperone DAXX prevents CENP-A mislocalization and rescues the reduced interkinetochore distance and CIN phenotype in CENP-A overexpressing cells. In summary, our results establish that CENP-A overexpression and mislocalization result in a CIN phenotype in human cells. This study provides insights into how overexpression of CENP-A may contribute to CIN in cancers and underscore the importance of understanding the pathways that prevent CENP-A mislocalization for genome stability.