Remodeling of cell shape during morphogenesis is driven by the coordinated expansion and contraction of specific plasma membrane domains. Loss of this coordination results in abnormal cell shape and embryonic lethality. Here, we show that plasma membrane lipid composition plays a key role in coordinating plasma membrane contraction during expansion. We found that an increase in PI(4,5)P2 levels caused premature actomyosin contraction, resulting in the formation of shortened cells. Conversely, acute depletion of PI(4,5)P2 blocked plasma membrane expansion and led to premature actomyosin disassembly. PI(4,5)P2-mediated contractility is counteracted by PI(3,4,5)P3 and the zygotic gene bottleneck, which acts by limiting myosin recruitment during plasma membrane expansion. Collectively, these data support a model in which the ratio of PI(4,5)P2/PI(3,4,5)P3 coordinates actomyosin contractility and plasma membrane expansion during tissue morphogenesis, thus ensuring proper cell shape.