Loss of mitotic checkpoint contributes to chromosomal instability, leading to carcinogenesis. In this study, we identified a novel splicing variant of mitotic arrest deficient 1 (MAD1), designated MAD1beta, and investigated its role in mitotic checkpoint control in hepatocellular carcinoma (HCC). The expression levels of human MAD1beta were examined in hepatoma cell lines and human HCC samples. The functional roles of MAD1beta in relation to the mitotic checkpoint control, chromosomal instability, and binding with MAD2 were assessed in hepatoma cell lines. On sequencing, MAD1beta was found to have deletion of exon 4. It was expressed at both mRNA and protein levels in the nine hepatoma cell lines tested and was overexpressed in 12 of 50 (24%) human HCCs. MAD1beta localized in the cytoplasm, whereas MAD1alpha was found in the nucleus. This cytoplasmic localization of MAD1beta was due to the absence of a nuclear localization signal in MAD1alpha. In addition, MAD1beta was found to physically interact with MAD2 and sequester it in the cytoplasm. Furthermore, expression of MAD1beta induced mitotic checkpoint impairment, chromosome bridge formation, and aberrant chromosome numbers via binding with MAD2. Our data suggest that the novel splicing variant MAD1beta may have functions different from those of MAD1alpha and may play opposing roles to MAD1alpha in mitotic checkpoint control in hepatocarcinogenesis.