Mutation of human microcephalin (MCPH1) causes autosomal recessive primary microcephaly, a developmental disorder characterized by reduced brain size. We identified mcph1, the Drosophila homolog of MCPH1, in a genetic screen for regulators of S-M cycles in the early embryo. Embryos of null mcph1 female flies undergo mitotic arrest with barrel-shaped spindles lacking centrosomes. Mutation of Chk2 suppresses these defects, indicating that they occur secondary to a previously described Chk2-mediated response to mitotic entry with unreplicated or damaged DNA. mcph1 embryos exhibit genomic instability as evidenced by frequent chromatin bridging in anaphase. In contrast to studies of human MCPH1, the ATR/Chk1-mediated DNA checkpoint is intact in Drosophila mcph1 mutants. Components of this checkpoint, however, appear to cooperate with MCPH1 to regulate embryonic cell cycles in a manner independent of Cdk1 phosphorylation. We propose a model in which MCPH1 coordinates the S-M transition in fly embryos: in the absence of mcph1, premature chromosome condensation results in mitotic entry with unreplicated DNA, genomic instability, and Chk2-mediated mitotic arrest. Finally, brains of mcph1 adult male flies have defects in mushroom body structure, suggesting an evolutionarily conserved role for MCPH1 in brain development.