The early Caenorhabditis elegans embryo divides with a stereotyped pattern of cleavages to produce cells that vary in developmental potential. Differences in cleavage plane orientation arise between the anterior and posterior cells of the 2-cell embryo as a result of asymmetries in centrosome positioning. Mechanisms that position centrosomes are thought to involve interactions between microtubules and the cortex, however, these mechanisms remain poorly defined. Interestingly, in the early embryo the shape of the centrosome predicts its subsequent movement. We have used rhodamine-tubulin and live imaging techniques to study the development of asymmetries in centrosome morphology and positioning. In contrast to studies using fixed embryos, our images provide a detailed characterization of the dynamics of centrosome flattening. In addition, our observations of centrosome behavior in vivo challenge previous assumptions regarding centrosome separation by illustrating that centrosome flattening and daughter centrosome separation are distinct processes, and by revealing that nascent daughter centrosomes may become separated from the nucleus. Finally, we provide evidence that the midbody specifies a region of the cortex that directs rotational alignment of the centrosome-nucleus complex and that the process is likely to involve multiple interactions between microtubules and the cortex; the process of alignment involves oscillations and overshoots, suggesting a multiplicity of cortical sites that interact with microtubules.