Progression through the cell cycle relies on oscillation of cyclin-dependent kinase (Cdk) activity. One mechanism for downregulating Cdk signaling is to activate opposing phosphatases. The Cdc14 family of phosphatases counteracts Cdk1 phosphorylation in diverse organisms to allow proper exit from mitosis and cytokinesis. However, the role of the vertebrate CDC14 phosphatases, CDC14A and CDC14B, in re-setting the cell for interphase remains unclear. To understand Cdc14 function in vertebrates, we cloned the zebrafish cdc14b gene and used antisense morpholino oligonucleotides and an insertional mutation to inhibit its function during early development. Loss of Cdc14B function led to an array of phenotypes, including hydrocephaly, curved body, kidney cysts and left-right asymmetry defects, reminiscent of zebrafish mutants with defective cilia. Indeed, we report that motile and primary cilia were shorter in cdc14b-deficient embryos. We also demonstrate that Cdc14B function in ciliogenesis requires its phosphatase activity and can be dissociated from its function in cell cycle control. Finally, we propose that Cdc14B plays a role in the regulation of cilia length in a pathway independent of fibroblast growth factor (FGF). This first study of a loss of function of a Cdc14 family member in a vertebrate organism reveals a new role for Cdc14B in ciliogenesis and consequently in a number of developmental processes.