Zfp423 encodes a 30-zinc finger transcription factor that intersects several canonical signaling pathways. Zfp423 mutations result in ciliopathy-related phenotypes, including agenesis of the cerebellar vermis in mice and Joubert syndrome (JBTS19) and nephronophthisis (NPHP14) in humans. Unlike most ciliopathy genes, Zfp423 encodes a nuclear protein and its developmental expression is complex, leading to alternative proposals for cellular mechanisms. Here we show that Zfp423 is expressed by cerebellar granule cell precursors, that loss of Zfp423 in these precursors leads to cell-intrinsic reduction in proliferation, loss of response to Shh, and primary cilia abnormalities that include diminished translocation of both Smoothened and IFT88. Loss of Zfp423 alters expression of several genes encoding key cilium components, including increased expression of Tulp3. Tulp3 is a direct binding target of Zfp423 and reducing the overexpression of Tulp3 in Zfp423-deficient cells suppresses Smoothened translocation defects. These results define Zfp423 deficiency as a bona fide ciliopathy, acting upstream of Shh signaling, and indicate a mechanism intrinsic to granule cell precursors for the resulting cerebellar hypoplasia.