Cilia are microtubule-based organelles that mediate signal transduction in a variety of tissues. Despite their importance, the signalling cascades that regulate cilium formation remain incompletely understood. Here we report that prostaglandin signalling affects ciliogenesis by regulating anterograde intraflagellar transport (IFT). Zebrafish leakytail (lkt) mutants show ciliogenesis defects, and the lkt locus encodes an ATP-binding cassette transporter (ABCC4). We show that Lkt/ABCC4 localizes to the cell membrane and exports prostaglandin E2 (PGE2), a function that is abrogated by the Lkt/ABCC4(T804M) mutant. PGE2 synthesis enzyme cyclooxygenase-1 and its receptor, EP4, which localizes to the cilium and activates the cyclic-AMP-mediated signalling cascade, are required for cilium formation and elongation. Importantly, PGE2 signalling increases anterograde but not retrograde velocity of IFT and promotes ciliogenesis in mammalian cells. These findings lead us to propose that Lkt/ABCC4-mediated PGE2 signalling acts through a ciliary G-protein-coupled receptor, EP4, to upregulate cAMP synthesis and increase anterograde IFT, thereby promoting ciliogenesis.