Drosophila has four loci encoding type 1 protein serine/threonine phosphatases (PP1s). Here we describe mutations in one of these genes, at 87B on chromosome 3. Mutants die at the larval-pupal boundary with little or no imaginal cell proliferation. Neuroblasts are delayed in progress through mitosis and show defective spindle organization, abnormal sister chromatid segregation, hyperploidy, and excessive chromosome condensation. Germline transformation of mutant flies with the wild-type PP1 87B gene restores normal mitosis, viability, and fertility. These results show that PP1 activity is required for mitotic progression and that the other loci cannot supply sufficient activity to complement loss of expression of the PP1 87B gene. Alternatively, the PP1 87B product may have a distinct specialized function in mitosis.