Cystic renal diseases are caused by mutations of proteins that share a unique subcellular localization: the primary cilium of tubular epithelial cells. Mutations of the ciliary protein inversin cause nephronophthisis type II, an autosomal recessive cystic kidney disease characterized by extensive renal cysts, situs inversus and renal failure. Here we report that inversin acts as a molecular switch between different Wnt signaling cascades. Inversin inhibits the canonical Wnt pathway by targeting cytoplasmic dishevelled (Dsh or Dvl1) for degradation; concomitantly, it is required for convergent extension movements in gastrulating Xenopus laevis embryos and elongation of animal cap explants, both regulated by noncanonical Wnt signaling. In zebrafish, the structurally related switch molecule diversin ameliorates renal cysts caused by the depletion of inversin, implying that an inhibition of canonical Wnt signaling is required for normal renal development. Fluid flow increases inversin levels in ciliated tubular epithelial cells and seems to regulate this crucial switch between Wnt signaling pathways during renal development.