Coordinated cell polarization and mitotic spindle orientation are thought to be important for epithelial morphogenesis. Whether spindle orientation is indeed linked to epithelial morphogenesis and how it is controlled at the molecular level is still unknown. Here, we show that the NuMA- and Gα-binding protein LGN is required for directing spindle orientation during cystogenesis of MDCK cells. LGN localizes to the lateral cell cortex, and is excluded from the apical cell cortex of dividing cells. Depleting LGN, preventing its cortical localization, or disrupting its interaction with endogenous NuMA or Gα proteins all lead to spindle misorientation and abnormal cystogenesis. Moreover, artificial mistargeting of endogenous LGN to the apical membrane results in a near 90° rotation of the spindle axis and profound cystogenesis defects that are dependent on cell division. The normal apical exclusion of LGN during mitosis appears to be mediated by atypical PKC. Thus, cell polarization-mediated spatial restriction of spindle orientation determinants is critical for epithelial morphogenesis.