Centromeres are critically important for chromosome stability and integrity. Most eukaryotes have regional centromeres that include long tracts of repetitive DNA packaged into pericentric heterochromatin. Neocentromeres, new sites of functional kinetochore assembly, can form at ectopic loci because no DNA sequence is strictly required for assembly of a functional kinetochore. In humans, neocentromeres often arise in cells with gross chromosome rearrangements that rescue an acentric chromosome. Here, we studied the properties of centromeres in Candida albicans, the most prevalent fungal pathogen of humans, which has small regional centromeres that lack pericentric heterochromatin. We functionally delimited centromere DNA on Chromosome 5 (CEN5) and then replaced the entire region with the counter-selectable URA3 gene or other marker genes. All of the resulting cen5Δ::URA3 transformants stably retained both copies of Chr5, indicating that a functional neocentromere had assembled efficiently on the homolog lacking CEN5 DNA. Strains selected to maintain only the cen5Δ::URA3 homolog and no wild-type Chr5 homolog also grew well, indicating that neocentromere function is independent of the presence of any wild-type CEN5 DNA. Two classes of neocentromere (neoCEN) strains were distinguishable: “proximal neoCEN” and “distal neoCEN” strains. Neocentromeres in the distal neoCEN strains formed at loci about 200–450 kb from cen5Δ::URA3 on either chromosome arm, as detected by massively parallel sequencing of DNA isolated by CENP-ACse4p chromatin immunoprecipitation (ChIP). In the proximal neoCEN strains, the neocentromeres formed directly adjacent to cen5Δ::URA3 and moved onto the URA3 DNA, resulting in silencing of its expression. Functional neocentromeres form efficiently at several possible loci that share properties of low gene density and flanking repeated DNA sequences. Subsequently, neocentromeres can move locally, which can be detected by silencing of an adjacent URA3 gene, or can relocate to entirely different regions of the chromosome. The ability to select for neocentromere formation and movement in C. albicans permits mechanistic analysis of the assembly and maintenance of a regional centromere.