Animal cells undergo dramatic actin-dependent changes in shape as they progress through mitosis; they round up upon mitotic entry and elongate during chromosome segregation before dividing into two [1-3]. Moesin, the sole Drosophila ERM-family protein , plays a critical role in this process, through the construction of a stiff, rounded metaphase cortex [5-7]. At mitotic exit, this rigid cortex must be dismantled to allow for anaphase elongation and cytokinesis through the loss of the active pool of phospho-Thr559moesin from cell poles. Here, in an RNA interference (RNAi) screen for phosphatases involved in the temporal and spatial control of moesin, we identify PP1-87B RNAi as having elevated p-moesin levels and reduced cortical compliance. In mitosis, RNAi-induced depletion of PP1-87B or depletion of a conserved noncatalytic PP1 phosphatase subunit Sds22 leads to defects in p-moesin clearance from cell poles at anaphase, a delay in anaphase elongation, together with defects in bipolar anaphase relaxation and cytokinesis. Importantly, similar cortical defects are seen at anaphase following the expression of a constitutively active, phosphomimetic version of moesin. These data reveal a new role for the PP1-87B/Sds22 phosphatase, an important regulator of the metaphase-anaphase transition, in coupling moesin-dependent cell shape changes to mitotic exit.