MIP-T3 is a human protein found previously to associate with microtubules and the kinesin-interacting neuronal protein DISC1 (Disrupted-in-Schizophrenia 1), but whose cellular function(s) remains unknown. Here we demonstrate that the C. elegans MIP-T3 ortholog DYF-11 is an intraflagellar transport (IFT) protein that plays a critical role in assembling functional kinesin motor-IFT particle complexes. We have cloned a loss of function dyf-11 mutant in which several key components of the IFT machinery, including Kinesin-II, as well as IFT subcomplex A and B proteins, fail to enter ciliary axonemes and/or mislocalize, resulting in compromised ciliary structures and sensory functions, and abnormal lipid accumulation. Analyses in different mutant backgrounds further suggest that DYF-11 functions as a novel component of IFT subcomplex B. Consistent with an evolutionarily conserved cilia-associated role, mammalian MIP-T3 localizes to basal bodies and cilia, and zebrafish mipt3 functions synergistically with the Bardet-Biedl syndrome protein Bbs4 to ensure proper gastrulation, a key cilium- and basal body-dependent developmental process. Our findings therefore implicate MIP-T3 in a previously unknown but critical role in cilium biogenesis and further highlight the emerging role of this organelle in vertebrate development.