Mutation of the zebrafish pescadillo gene blocks expansion of a number of tissues in the developing embryo, suggesting roles for its gene product in controlling cell proliferation. We report that levels of the pescadillo protein increase in rodent hepatocytes as they enter the cell cycle. Pescadillo protein localizes to distinct substructures of the interphase nucleus including nucleoli, the site of ribosome biogenesis. During mitosis pescadillo closely associates with the periphery of metaphase chromosomes and by late anaphase is associated with nucleolus-derived foci and prenucleolar bodies. Blastomeres in mouse embryos lacking pescadillo arrest at morula stages of development, the nucleoli fail to differentiate and accumulation of ribosomes is inhibited. We propose that in mammalian cells pescadillo is essential for ribosome biogenesis and nucleologenesis and that disruption to its function results in cell cycle arrest.