Dynein mediates spindle positioning in budding yeast by pulling on astral microtubules (MTs) from the cell cortex. The MT-associated protein She1 regulates dynein activity along astral MTs and directs spindle movements toward the bud cell. In addition to localizing to astral MTs, She1 also targets to the spindle, but its role on the spindle remains unknown. Using function-separating alleles, live-cell spindle assays, and in vitro biochemical analyses, we show that She1 is required for the maintenance of metaphase spindle stability. She1 binds and cross-links MTs via a C-terminal MT-binding site. She1 can also self-assemble into ring-shaped oligomers. In cells, She1 stabilizes interpolar MTs, preventing spindle deformations during movement, and we show that this activity is regulated by Ipl1/Aurora B phosphorylation during cell cycle progression. Our data reveal how She1 ensures spindle integrity during spindle movement across the bud neck and suggest a potential link between regulation of spindle integrity and dynein pathway activity.