The phosphoinositide (PI) cycle is an important signal transduction pathway that, upon activation, generates intracellular second messengers and leads to calcium release. To determine whether PI cycle-mediated intracellular calcium release is required for body plan formation, we systematically dissect PI cycle function in the zebrafish (Danio rerio). We inhibit PI cycle function at three different steps and deplete internal calcium stores, demonstrating an impact on endogenous calcium release and Wnt/beta-catenin signaling. Inhibition of endogenous calcium modulation induces hyperdorsalized phenotypes in a dose-dependent manner. Ectopic dorsal-signaling centers are generated in PI cycle-inhibited embryos as demonstrated by altered beta-catenin subcellular localization and ectopic expression of beta-catenin target genes. These results provide evidence that modulation of calcium release is critical for early embryonic patterning and acts by influencing the stabilization of beta-catenin protein.