The centrosome consists of two centrioles surrounded by the pericentriolar material (PCM). In late G2 phase, centrosomes enlarge by recruiting extra PCM, and concomitantly its microtubule nucleation activity increases dramatically. The regulatory mechanisms of this dynamic change of centrosomes are not well understood. Protein phosphatase 4 (PP4) is known to localize to mitotic centrosomes in mammals and Drosophila. An involvement of PP4 in the mitotic spindle assembly has been implicated in Drosophila, but in vivo functions of PP4 in other organisms are largely unknown. Here we characterize two Caenorhabditis elegans PP4 genes, named pph-4.1 and pph-4.2. Inhibition of the function of each gene by RNA-mediated interference (RNAi) revealed that PPH-4.1 was essential for embryogenesis but PPH-4.2 was not. More specifically, PPH-4.1 was required for the formation of spindles in mitosis and sperm meiosis. However, this phosphatase was apparently dispensable for female meiotic divisions, which do not depend on centrosomes. In the cell depleted of pph-4.1 activity, localization of gamma-tubulin and a Polo-like kinase homologue to the centrosome was severely disturbed. Immunofluorescence staining revealed that PPH-4.1 was present at centrosomes from prophase to telophase, but not during interphase. These results indicate that PPH-4.1 is a centrosomal protein involved in the recruitment of PCM components to the centrosome, and is essential for the activation of microtubule nucleation potential of the centrosome. Furthermore, chiasmata between homologous chromosomes were often absent in oocytes that lacked pph-4.1 activity. Thus, besides promoting spindle formation, PPH-4.1 appears to play a role in either the establishment or the maintenance of chiasmata during meiotic prophase I.