The development of multicellular organisms is dependent on the tight coordination between tissue growth and morphogenesis. The stereotypical orientation of cell divisions has been proposed to be a fundamental mechanism by which proliferating and growing tissues take shape. However, the actual contribution of stereotypical division orientation (SDO) to tissue morphogenesis is unclear. In zebrafish, cell divisions with stereotypical orientation have been implicated in both body-axis elongation and neural rod formation, although there is little direct evidence for a critical function of SDO in either of these processes. Here we show that SDO is required for formation of the neural rod midline during neurulation but dispensable for elongation of the body axis during gastrulation. Our data indicate that SDO during both gastrulation and neurulation is dependent on the noncanonical Wnt receptor Frizzled 7 (Fz7) and that interfering with cell division orientation leads to severe defects in neural rod midline formation but not body-axis elongation. These findings suggest a novel function for Fz7-controlled cell division orientation in neural rod midline formation during neurulation.