Cilia are present on nearly all cell types in mammals and perform remarkably diverse functions. However, the mechanisms underlying ciliogenesis are unclear. Here, we cloned a previously uncharacterized highly conserved gene, stumpy, located on mouse chromosome 7. Stumpy was ubiquitously expressed, and conditional loss in mouse resulted in complete penetrance of perinatal hydrocephalus (HC) and severe polycystic kidney disease (PKD). We found that cilia in stumpy mutant brain and kidney cells were absent or markedly deformed, resulting in defective flow of cerebrospinal fluid. Stumpy colocalized with ciliary basal bodies, physically interacted with gamma-tubulin, and was present along ciliary axonemes, suggesting that stumpy plays a role in ciliary axoneme extension. Therefore, stumpy is essential for ciliogenesis and may be involved in the pathogenesis of human congenital malformations such as HC and PKD.