The Drosophila body axes are established in the oocyte during oogenesis. Oocyte polarization is initiated by Gurken, which signals from the germline through the epidermal growth factor receptor (Egfr) to the posterior follicle cells (PFCs). In response the PFCs generate an unidentified polarizing signal that regulates oocyte polarity. We have identified a loss-of-function mutation of flapwing, which encodes the catalytic subunit of protein phosphatase 1β (PP1β) that disrupts oocyte polarization. We show that PP1β, by regulating myosin activity, controls the generation of the polarizing signal. Excessive myosin activity in the PFCs causes oocyte mispolarization and defective Notch signaling and endocytosis in the PFCs. The integrated activation of JAK/STAT and Egfr signaling results in the sensitivity of PFCs to defective Notch. Interestingly, our results also demonstrate a role of PP1β in generating the polarizing signal independently of Notch, indicating a direct involvement of somatic myosin activity in axis formation.