Asymmetric division is an important property of stem cells. In Caenorhabditis elegans, the Wnt/beta-catenin asymmetry pathway determines the polarity of most asymmetric divisions. The Wnt signalling components such as beta-catenin localize asymmetrically to the cortex of mother cells to produce two distinct daughter cells. However, the molecular mechanism to polarize them remains to be elucidated. Here, we demonstrate that intracellular phospholipase A(1) (PLA(1)), a poorly characterized lipid-metabolizing enzyme, controls the subcellular localizations of beta-catenin in the terminal asymmetric divisions of epithelial stem cells (seam cells). In mutants of ipla-1, a single C. elegans PLA(1) gene, cortical beta-catenin is delocalized and the asymmetry of cell-fate specification is disrupted in the asymmetric divisions. ipla-1 mutant phenotypes are rescued by expression of ipla-1 in seam cells in a catalytic activity-dependent manner. Furthermore, our genetic screen utilizing ipla-1 mutants reveals that reduction of endosome-to-Golgi retrograde transport in seam cells restores normal subcellular localization of beta-catenin to ipla-1 mutants. We propose that membrane trafficking regulated by ipla-1 provides a mechanism to control the cortical asymmetry of beta-catenin.