The centromere is a chromatin region that serves as the spindle attachment point and directs accurate inheritance of eukaryotic chromosomes during cell divisions. However, the mechanism by which the centromere assembles and stabilizes at a specific genomic region is not clear. The de novo formation of a human/mammalian artificial chromosome (HAC/MAC) with a functional centromere assembly requires the presence of alpha-satellite DNA containing binding motifs for the centromeric CENP-B protein. We demonstrate here that de novo centromere assembly on HAC/MAC is dependent on CENP-B. In contrast, centromere formation is suppressed in cells expressing CENP-B when alpha-satellite DNA was integrated into a chromosomal site. Remarkably, on those integration sites CENP-B enhances histone H3-K9 trimethylation and DNA methylation, thereby stimulating heterochromatin formation. Thus, we propose that CENP-B plays a dual role in centromere formation, ensuring de novo formation on DNA lacking a functional centromere but preventing the formation of excess centromeres on chromosomes.