Polycystin-1 (PC-1), the product of the PKD1 gene, mutated in the majority of cases of Autosomal Dominant Polycystic Kidney Disease (ADPKD), is a very large (approximately 520 kDa) plasma membrane receptor localized in several subcellular compartments including cell-cell/matrix junctions as well as cilia. While heterologous over-expression systems have allowed identification of several of the potential biological roles of this receptor, its precise function remains largely elusive. Studying PC-1 in vivo has been a challenging task due to its complexity and low expression levels. To overcome these limitations and facilitate the study of endogenous PC-1, we have inserted HA- or Myc-tag sequences into the Pkd1 locus by homologous recombination. Here, we show that our approach was successful in generating a fully functional and easily detectable endogenous PC-1. Characterization of PC-1 distribution in vivo showed that it is expressed ubiquitously and is developmentally-regulated in most tissues. Furthermore, our novel tool allowed us to investigate the role of PC-1 in brain, where the protein is abundantly expressed. Subcellular localization of PC-1 revealed strong and specific staining in ciliated ependymal and choroid plexus cells. Consistent with this distribution, we observed hydrocephalus formation both in the ubiquitous knock-out embryos and in newborn mice with conditional inactivation of the Pkd1 gene in the brain. Both choroid plexus and ependymal cilia were morphologically normal in these mice, suggesting a role for PC-1 in ciliary function or signalling in this compartment, rather than in ciliogenesis. We propose that the role of PC-1 in the brain cilia might be to prevent hydrocephalus, a previously unrecognized role for this receptor and one that might have important implications for other genetic or sporadic diseases.