In the Caenorhabditis elegans zygote, polarization of the anteroposterior (AP) axis occurs during a brief period of reorganization that follows fertilization and results in the establishment of discrete cytoplasmic and cortical domains. In the cytoplasm, germ-line or P granules are circulated by an actomyosin-driven fountain flow of cytoplasm and localize to the posterior, while in the cortex, two proteins required for AP polarity, PAR-2 and PAR-3, localize to the posterior and the anterior, respectively. The identity of the positional cue that determines AP axis orientation is not known, although it has been postulated to be a component of the sperm pronucleus/centrosome complex (SPCC) as the position of the SPCC correlates with the orientation of the AP axis and the direction of the fountain flows. Here, we show that mutations in the spd-2 gene disrupt polarization of the AP axis. In mutant zygotes, the fountain flow of cytoplasm and associated asymmetric cortical contractions are absent, P granules do not localize, and cortical PAR-3 does not become asymmetrically distributed. Interestingly, cortical PAR-2 localizes randomly to either or both poles. The random positioning of PAR-2 requires PAR-3 and indicates that a spd-2-dependent mechanism normally modulates PAR-2/PAR-3 interactions to correctly position PAR-2 at the posterior. spd-2 mutations also disrupt formation of the SPCC by delaying and attenuating the formation of sperm asters until after the period of reorganization, suggesting that spd-2 mutations disrupt formation of the positional cue. Our results also indicate that sperm asters are not essential for pronuclear migration but are required for rapid female pronuclear movement and premitotic positioning of the pronuclei.