Apical-basal polarity is a common trait that underlies epithelial function. Although the asymmetric distribution of cortical polarity proteins works in a functioning equilibrium, it also retains plasticity to accommodate cell division, during which the basolateral determinant Lgl is released from the cortex. Here, we investigated how Lgl restores its cortical localization to maintain the integrity of dividing epithelia. We show that cytoplasmic Lgl is reloaded to the cortex at mitotic exit in Drosophila epithelia. Lgl cortical localization depends on protein phosphatase 1, which dephosphorylates Lgl on the serines phosphorylated by aPKC and Aurora A kinases through a mechanism that relies on the regulatory subunit Sds22 and a PP1-interacting RVxF motif of Lgl. This mechanism maintains epithelial polarity and is of particular importance at mitotic exit to couple Lgl cortical reloading with the polarization of the apical domain. Hence, PP1-mediated dephosphorylation of Lgl preserves the apical-basal organization of proliferative epithelia.