Ciliogenesis and cystogenesis require the exocyst, a conserved eight-protein trafficking complex that traffics ciliary proteins. In culture, the small GTPase Cdc42 co-localizes with the exocyst at primary cilia and interacts with the exocyst component Sec10. The role of Cdc42 in vivo, however, is not well understood. Here, knockdown of cdc42 in zebrafish produced a phenotype similar to sec10 knockdown, including tail curvature, glomerular expansion, and mitogen-activated protein kinase (MAPK) activation, suggesting that cdc42 and sec10 cooperate in ciliogenesis. In addition, cdc42 knockdown led to hydrocephalus and loss of photoreceptor cilia. Furthermore, there was a synergistic genetic interaction between zebrafish cdc42 and sec10, suggesting that cdc42 and sec10 function in the same pathway. Mice lacking Cdc42 specifically in kidney tubular epithelial cells died of renal failure within weeks of birth. Histology revealed cystogenesis in distal tubules and collecting ducts, decreased ciliogenesis in cyst cells, increased tubular cell proliferation, increased apoptosis, increased fibrosis, and led to MAPK activation, all of which are features of polycystic kidney disease, especially nephronophthisis. Taken together, these results suggest that Cdc42 localizes the exocyst to primary cilia, whereupon the exocyst targets and docks vesicles carrying ciliary proteins. Abnormalities in this pathway result in deranged ciliogenesis and polycystic kidney disease.