Asymmetric cell division is a conserved mechanism to generate cellular diversity during animal development and a key process in cancer and stem cell biology. Despite the increasing number of proteins characterized, the complex network of proteins interactions established during asymmetric cell division is still poorly understood. This suggests that additional components must be contributing to orchestrate all the events underlying this tightly modulated process. The PDZ protein Canoe (Cno) and its mammalian counterparts AF-6 and Afadin are critical to regulate intracellular signaling and to organize cell junctions throughout development. Here, we show that Cno functions as a new effector of the apical proteins Inscuteable (Insc)-Partner of Inscuteable (Pins)-Galphai during the asymmetric division of Drosophila neuroblasts (NBs). Cno localizes apically in metaphase NBs and coimmunoprecipitates with Pins in vivo. Furthermore, Cno functionally interacts with the apical proteins Insc, Galphai, and Mushroom body defect (Mud) to generate correct neuronal lineages. Failures in muscle and heart lineages are also detected in cno mutant embryos. Our results strongly support a new function for Cno regulating key processes during asymmetric NB division: the localization of cell-fate determinants, the orientation of the mitotic spindle, and the generation of unequal-sized daughter cells.