We show that in Madin-Darby canine kidney (MDCK) cells, an apical ceramide-enriched compartment (ACEC) at the base of primary cilia is colocalized with Rab11a. Ceramide and Rab11a vesicles isolated by magnetic sorting contain a highly similar profile of proteins (atypical protein kinase C [aPKC], Cdc42, Sec8, Rab11a, and Rab8) and ceramide species, suggesting the presence of a ciliogenic protein complex associated with ceramide at the ACEC. It is intriguing that C16 and C18 ceramide, although less abundant ceramide species in MDCK cells, are highly enriched in ceramide and Rab11a vesicles. Expression of a ceramide-binding but dominant-negative mutant of aPKC suppresses ciliogenesis, indicating that the association of ceramide with aPKC is critical for the formation of this complex. Our results indicate that ciliogenic ceramide is derived from apical sphingomyelin (SM) that is endocytosed and then converted to the ACEC. Consistently, inhibition of acid sphingomyelinase with imipramine disrupts ACEC formation, association of ciliogenic proteins with Rab11a vesicles, and cilium formation. Ciliogenesis is rescued by the histone deacetylase (HDAC) inhibitor trichostatin A, indicating that ceramide promotes tubulin acetylation in cilia. Taken together, our results suggest that the ACEC is a novel compartment in which SM-derived ceramide induces formation of a ciliogenic lipid-protein complex that sustains primary cilia by preventing deacetylation of microtubules.