Primary cilia are solitary, non-motile extensions of the centriole found on nearly all nucleated eukaryotic cells between cell divisions. Only ∼200–300 nm in diameter and a few micrometres long, they are separated from the cytoplasm by the ciliary neck and basal body. Often called sensory cilia, they are thought to receive chemical and mechanical stimuli and initiate specific cellular signal transduction pathways. When activated by a ligand, hedgehog pathway proteins, such as GLI2 and smoothened (SMO), translocate from the cell into the cilium^,. Mutations in primary ciliary proteins are associated with severe developmental defects. The ionic conditions, permeability of the primary cilia membrane, and effectiveness of the diffusion barriers between the cilia and cell body are unknown. Here we show that cilia are a unique calcium compartment regulated by a heteromeric TRP channel, PKD1L1–PKD2L1, in mice and humans. In contrast to the hypothesis that polycystin (PKD) channels initiate changes in ciliary calcium that are conducted into the cytoplasm, we show that changes in ciliary calcium concentration occur without substantially altering global cytoplasmic calcium. PKD1L1–PKD2L1 acts as a ciliary calcium channel controlling ciliary calcium concentration and thereby modifying SMO-activated GLI2 translocation and GLI1 expression.