Centriole-to-basal body conversion, a complex process essential for ciliogenesis, involves the progressive addition of specific proteins to centrioles. CHIBBY (CBY) is a coiled-coil domain protein first described as interacting with β-catenin and involved in Wg-Int (WNT) signaling. We found that, in Drosophila melanogaster, CBY was exclusively expressed in cells that require functional basal bodies, i.e., sensory neurons and male germ cells. CBY was associated with the basal body transition zone (TZ) in these two cell types. Inactivation of cby led to defects in sensory transduction and in spermatogenesis. Loss of CBY resulted in altered ciliary trafficking into neuronal cilia, irregular deposition of proteins on spermatocyte basal bodies, and, consequently, distorted axonemal assembly. Importantly, cby(1/1) flies did not show Wingless signaling defects. Hence, CBY is essential for normal basal body structure and function in Drosophila, potentially through effects on the TZ. The function of CBY in WNT signaling in vertebrates has either been acquired during vertebrate evolution or lost in Drosophila.