The lipid composition of the primary cilia membrane is emerging as a critical regulator of cilia formation, maintenance and function. Here, we show that conditional deletion of the phosphoinositide 5′-phosphatase gene Inpp5e, mutation of which is causative of Joubert syndrome, in terminally developed mouse olfactory sensory neurons (OSNs), leads to a dramatic remodeling of ciliary phospholipids that is accompanied by marked elongation of cilia. Phosphatidylinositol (4,5)-bisphosphate [PI(4,5)P₂], which is normally restricted to the proximal segment redistributed to the entire length of cilia in Inpp5e knockout mice with a reduction in phosphatidylinositol (3,4)-bisphosphate [PI(3,4)P₂] and elevation of phosphatidylinositol (3,4,5)-trisphosphate [PI(3,4,5)P₃] in the dendritic knob. The redistribution of phosphoinositides impaired odor adaptation, resulting in less efficient recovery and altered inactivation kinetics of the odor-evoked electrical response and the odor-induced elevation of cytoplasmic Ca²⁺. Gene replacement of Inpp5e through adenoviral expression restored the ciliary localization of PI(4,5)P₂ and odor response kinetics in OSNs. Our findings support the role of phosphoinositides as a modulator of the odor response and in ciliary biology of native multi-ciliated OSNs.