Cell divisions are sometimes oriented by extrinsic signals, by mechanisms that are poorly understood. Proteins containing TPR and GoLoco-domains (C. elegans GPR-1/2, Drosophila Pins, vertebrate LGN and AGS3) are candidates for mediating mitotic spindle orientation by extrinsic signals, but the mechanisms by which TPR-GoLoco proteins may localize in response to extrinsic cues are not well defined. The C. elegans TPR-GoLoco protein pair GPR-1/2 is enriched at a site of contact between two cells - the endomesodermal precursor EMS and the germline precursor P(2) - and both cells align their divisions toward this shared cell-cell contact. To determine whether GPR-1/2 is enriched at this site within both cells, we generated mosaic embryos with GPR-1/2 bearing a different fluorescent tag in different cells. We were surprised to find that GPR-1/2 distribution is symmetric in EMS, where GPR-1/2 had been proposed to function as an asymmetric cue for spindle orientation. Instead, GPR-1/2 is asymmetrically distributed only in P(2). We demonstrate a role for normal GPR-1/2 localization in P(2) division orientation. We show that MES-1/Src signaling plays an instructive role in P(2) for asymmetric GPR-1/2 localization and normal spindle orientation. We ruled out a model in which signaling localizes GPR-1/2 by locally inhibiting LET-99, a GPR-1/2 antagonist. Instead, asymmetric GPR-1/2 distribution is established by destabilization at one cell contact, diffusion, and trapping at another cell contact. Once the mitotic spindle of P(2) is oriented normally, microtubule-dependent removal of GPR-1/2 prevented excess accumulation, in an apparent negative-feedback loop. These results highlight the role of dynamic TPR-GoLoco protein localization as a key mediator of mitotic spindle alignment in response to instructive, external cues.