During development, neural precursors divide to produce new precursors and cells that differentiate as neurons and glia. In Drosophila, apicobasal polarity and orientation of the mitotic spindle play important roles in specifying the progeny of neural precursors for different fates. We examined orientation of zebrafish spinal cord precursors using time-lapse imaging and tested the function of protein kinase C, iota (PrkCi), a member of the Par complex of proteins necessary for apicobasal polarity in the nervous system. We found that nearly all precursors divide within the plane of the neuroepithelium of wild-type embryos even when they must produce cells that have different fates. In the absence of PrkCi function, neural precursor divisions become oblique during late embryogenesis and excess oligodendrocytes form concomitant with loss of dividing cells. We conclude that PrkCi function and planar divisions are necessary for asymmetric, self-renewing division of spinal cord precursors.