The chicken talpid3 mutant, with polydactyly and defects in other embryonic regions that depend on hedgehog (Hh) signalling (e.g. the neural tube), has a mutation in KIAA0568. Similar phenotypes are seen in mice and in human syndromes with mutations in genes that encode centrosomal or intraflagella transport proteins. Such mutations lead to defects in primary cilia, sites where Hh signalling occurs. Here, we show that cells of talpid3 mutant embryos lack primary cilia and that primary cilia can be rescued with constructs encoding Talpid3. talpid3 mutant embryos also develop polycystic kidneys, consistent with widespread failure of ciliogenesis. Ultrastructural studies of talpid3 mutant neural tube show that basal bodies mature but fail to dock with the apical cell membrane, are misorientated and almost completely lack ciliary axonemes. We also detected marked changes in actin organisation in talpid3 mutant cells, which may explain misorientation of basal bodies. KIAA0586 was identified in the human centrosomal proteome and, using an antibody against chicken Talpid3, we detected Talpid3 in the centrosome of wild-type chicken cells but not in mutant cells. Cloning and bioinformatic analysis of the Talpid3 homolog from the sea anemone Nematostella vectensis identified a highly conserved region in the Talpid3 protein, including a predicted coiled-coil domain. We show that this region is required to rescue primary cilia formation and neural tube patterning in talpid3 mutant embryos, and is sufficient for centrosomal localisation. Thus, Talpid3 is one of a growing number of centrosomal proteins that affect both ciliogenesis and Hh signalling.