Cytokinesis critically depends on phosphatidylinositol 4,5-bisphosphate [PI(4,5)P2]. Synthesis of PI(4,5)P2 is crucial for several stages of cytokinesis, including actomyosin ring assembly and constriction, membrane tethering of spindle microtubules, and midbody organization. How these activities of PI(4,5)P2 are spatiotemporally controlled is unknown. Here we unravel a crucial function for local PI(4,5)P2 synthesis at the ingressed cleavage furrow by septin-binding isoforms of PIPKIγ to control midbody formation. We demonstrate that loss of PIPKIγ isoforms perturbs cytokinesis by impairing septin association with microtubules, and anillin and septin deposition at the intercellular bridge and at the midbody. This mechanism requires the ability of PIPKIγ isoforms to synthesize PI(4,5)P2 and to associate with septins. Septins and PIPKIγ further synergize to promote centralspindlin recruitment to the midbody. Our findings establish septin-associated PIPKIγ isoforms as spatiotemporal controllers of midbody organization during cytokinesis that act through generating a local pool of PI4,5P2 at the ingressed cleavage furrow.