In all eukaryotic organisms, the physical separation of two nascent cells must be coordinated with chromosome segregation and mitotic exit. In Saccharomyces cerevisiae and Schizosaccharomyces pombe this coordination depends on a number of genes that cooperate in intricate regulatory pathways termed mitotic exit network and septum initiation network, respectively. Here we have explored the function of potentially homologous genes in a metazoan organism, Caenorhabditis elegans, using RNA-mediated interference. Of all the genes tested, only depletion of CeCDC-14, the C. elegans homologue of the budding yeast dual-specificity phosphatase Cdc14p (Clp1/Flp1p in fission yeast), caused embryonic lethality. We show that CeCDC-14 is required for cytokinesis but may be dispensable for progression of the early embryonic cell cycles. In response to depletion of CeCDC-14, embryos fail to establish a central spindle, and several proteins normally found at this structure are mislocalized. CeCDC-14 itself localizes to the central spindle in anaphase and to the midbody in telophase. It colocalizes with the mitotic kinesin ZEN-4, and the two proteins depend on each other for correct localization. These findings identify the CDC14 phosphatase as an important regulator of central spindle formation and cytokinesis in a metazoan organism.