The centrosome is the main microtubule-organizing center in animal cells and comprises a mother and daughter centriole surrounded by pericentriolar material. During formation of primary cilia, the mother centriole transforms into a basal body that templates the ciliary axoneme. Ciliogenesis depends on mother centriole-specific distal appendages, whereas the role of subdistal appendages in ciliary function is unclear. Here, we identify CEP128 as a centriole subdistal appendage protein required for regulating ciliary signaling. Loss of CEP128 did not grossly affect centrosomal or ciliary structure but caused impaired transforming growth factor-β/bone morphogenetic protein (TGF-β/BMP) signaling in zebrafish and at the primary cilium in cultured mammalian cells. This phenotype is likely the result of defective vesicle trafficking at the cilium as ciliary localization of RAB11 was impaired upon loss of CEP128, and quantitative phosphoproteomics revealed that CEP128 loss affects TGF-β1-induced phosphorylation of multiple proteins that regulate cilium-associated vesicle trafficking.