α-Tubulin detyrosination, largely catalyzed by vasohibins, is involved in many microtubule (MT)-related cellular events. In this study, we identified a core heterodimeric complex of human small vasohibin-binding protein (SVBP) and vasohibin 1 (VASH1) (hereafter denoted as SVBP-VASH1) that catalyzes the detyrosination of a peptide derived from C-terminus of α-tubulin. We further solved the crystal structures of the SVBP-VASH1 heterodimer alone and in complex with either an inhibitor or a mutant substrate peptide. Our structural research, complemented by biochemical and mutagenesis experiments, resulted in identification of the key residues for VASH1 binding to SVBP and α-tubulin substrate. Our in vivo experiments reveal that MT detyrosination in general, as well as the interactions between SVBP, VASH1, and α-tubulin, are critical for spindle function and accurate chromosome segregation during mitosis. Furthermore, we found that the phenotypes caused by the depletion of vasohibins were largely rescued upon co-depletion of kinesin13/MCAK, suggesting the coordination between the MT depolymerase and MT detyrosination during mitosis. Thus our work not only provides structural insights into the molecular mechanism of α-tubulin detyrosination catalyzed by SVBP-bound vasohibins, but also uncovers the key role of vasohibins-mediated MT detyrosination in spindle morphology and chromosome segregation during mitosis.