Primary cilia and basal bodies are evolutionarily conserved organelles that mediate communication between the intracellular and extracellular environments. Here we show that bbs1, bbs4 and mkks (also known as bbs6), which encode basal body proteins, are required for convergence and extension in zebrafish and interact with wnt11 and wnt5b. Suppression of bbs1, bbs4 and mkks transcripts results in stabilization of beta-catenin with concomitant upregulation of T-cell factor (TCF)-dependent transcription in both zebrafish embryos and mammalian ciliated cells, a defect phenocopied by the silencing of the axonemal kinesin subunit KIF3A but not by chemical disruption of the cytoplasmic microtubule network. These observations are attributable partly to defective degradation by the proteasome; suppression of BBS4 leads to perturbed proteasomal targeting and concomitant accumulation of cytoplasmic beta-catenin. Cumulatively, our data indicate that the basal body is an important regulator of Wnt signal interpretation through selective proteolysis and suggest that defects in this system may contribute to phenotypes pathognomonic of human ciliopathies.