Primary cilia project from the surface of most vertebrate cells and are thought to be sensory organelles. Defects in primary cilia lead to cystic kidney disease, although the ciliary mechanisms that promote and maintain normal renal function remain incompletely understood. In this work, we generated a floxed allele of the ciliary assembly gene Ift20. Deleting this gene specifically in kidney collecting duct cells prevents cilia formation and promotes rapid postnatal cystic expansion of the kidney. Dividing collecting duct cells in early stages of cyst formation fail to properly orient their mitotic spindles along the tubule, whereas nondividing cells improperly position their centrosomes. At later stages, cells lacking cilia have increased canonical Wnt signaling and increased rates of proliferation. Thus, IFT20 functions to couple extracellular events to cell proliferation and differentiation.