Asymmetric cell division generates cell diversity in bacteria, yeast, and higher eukaryotes. In Drosophila, both neural and muscle progenitors divide asymmetrically. In these cells the Inscuteable (Insc) protein complex coordinates cell polarity and spindle orientation. Abstrakt (Abs) is a DEAD-box protein that regulates aspects of cell polarity in oocytes and embryos. We use a conditional allele of abs to investigate its role in neural and muscle progenitor cell polarity. In neuroblasts we observe loss of apical Insc crescents, failure in basal protein targeting, and defects in spindle orientation. In the GMC4-2a cell we observe loss of apical Insc crescents, defects in basal protein targeting, and equalization of sibling neuron fates; muscle precursors show a similar equalization of sibling cell fates. These phenotypes resemble those of insc mutants; indeed, abs mutants show a striking loss of Insc protein levels but no change of insc RNA levels. Furthermore, we find that the Abs protein physically interacts with insc RNA. Our results demonstrate a novel role for Abs in the posttranscriptional regulation of insc expression, which is essential for proper cell polarity, spindle orientation, and the establishment of distinct sibling cell fates within embryonic neural and muscle progenitors.