Fertilization triggers egg activation and converts the egg into a developing embryo. The events of this egg-to-embryo transition typically include the resumption of meiosis, the reorganization of the cortical actin cytoskeleton, and the remodeling of the oocyte surface. The factors that regulate sperm-dependent egg-activation events are not well understood. Caenorhabditis elegans EGG-3, a member of the protein tyrosine phosphatase-like (PTPL) family, is essential for regulating cell-surface and cortex rearrangements during egg activation in response to sperm entry. Although fertilization occurred normally in egg-3 mutants, the polarized dispersal of F-actin is altered, a chitin eggshell is not formed, and no polar bodies are produced. EGG-3 is associated with the oocyte plasma membrane in a pattern that is similar to CHS-1 and MBK-2. CHS-1 is required for eggshell deposition, whereas MBK-2 is required for the degradation of maternal proteins during the egg-to-embryo transition. The localization of CHS-1 and EGG-3 are interdependent and both genes were required for the proper localization of MBK-2 in oocytes. Therefore, EGG-3 plays a central role in egg activation by influencing polarized F-actin dynamics and the localization or activity of molecules that are directly involved in executing the egg-to-embryo transition.