Asymmetric localization of cell fate determinants is a crucial step in neuroblast asymmetric divisions. Whereas several protein kinases have been shown to mediate this process, no protein phosphatase has so far been implicated. In a clonal screen of larval neuroblasts we identified the evolutionarily conserved Protein Phosphatase 4 (PP4) regulatory subunit PP4R3/Falafel (Flfl) as a key mediator specific for the localization of Miranda (Mira) and associated cell fate determinants during both interphase and mitosis. Flfl is predominantly nuclear during interphase/prophase and cytoplasmic after nuclear envelope breakdown. Analyses of nuclear excluded as well as membrane targeted versions of the protein suggest that the asymmetric cortical localization of Mira and its associated proteins during mitosis depends on cytoplasmic/membrane-associated Flfl, whereas nuclear Flfl is required to exclude the cell fate determinant Prospero (Pros), and consequently Mira, from the nucleus during interphase/prophase. Attenuating the function of either the catalytic subunit of PP4 (PP4C; Pp4-19C in Drosophila) or of another regulatory subunit, PP4R2 (PPP4R2r in Drosophila), leads to similar defects in the localization of Mira and associated proteins. Flfl is capable of directly interacting with Mira, and genetic analyses indicate that flfl acts in parallel to or downstream from the tumor suppressor lethal (2) giant larvae (lgl). Our findings suggest that Flfl may target PP4 to the MIra protein complex to facilitate dephosphorylation step(s) crucial for its cortical association/asymmetric localization.