Proteins associated with primary cilia and basal bodies mediate numerous signaling pathways, but little is known about their role in Notch signaling. Here, we report that loss of the Bardet-Biedl syndrome proteins BBS1 or BBS4 produces increased Notch-directed transcription in a zebrafish reporter line and in human cell lines. Pathway overactivation is accompanied by reduced localization of Notch receptor at both the plasma membrane and the cilium. In Drosophila mutants, overactivation of Notch can result from receptor accumulation in endosomes, and recent studies implicate ciliary proteins in endosomal trafficking, suggesting a possible mechanism by which overactivation occurs in BBS mutants. Consistent with this, we observe genetic interaction of BBS1 and BBS4 with the endosomal sorting complexes required for transport (ESCRT) gene TSG101 and accumulation of receptor in late endosomes, reduced endosomal recycling and reduced receptor degradation in lysosomes. We observe similar defects with disruption of BBS3. Loss of another basal body protein, ALMS1, also enhances Notch activation and the accumulation of receptor in late endosomes, but does not disrupt recycling. These findings suggest a role for these proteins in the regulation of Notch through endosomal trafficking of the receptor.