Autosomal dominant polycystic liver disease (PCLD) is caused by mutations of either PRKCSH or Sec63, two proteins associated with the endoplasmic reticulum (ER). Both proteins are involved in carbohydrate processing, folding and translocation of newly synthesized glycoproteins. It is postulated that defective quality control of proteins initiates endoplasmic reticulum-associated degradation (ERAD), which disrupts hepatic homeostasis in patients with PRKCSH or Sec63 mutations. However, the precise molecular mechanisms are not known. Here, we show that over-expression or depletion of PRKCSH in zebrafish embryos leads to pronephric cysts, abnormal body curvature and situs inversus. Identical phenotypic changes are induced by depletion or over-expression of TRPP2. Increased PRKCSH levels ameliorate developmental abnormalities caused by over-expressed TRPP2, whereas excess TRPP2 can compensate the loss PRKCSH, indicating that the proteins share a common signaling pathway. PRKCSH binds the C-terminal domain of TRPP2, and both proteins co-localize within the ER. Furthermore, PRKCSH interacts with Herp, and inhibits Herp-mediated ubiquitination of TRPP2. Our findings suggest that PRKCSH functions as a chaperone-like molecule, which prevents ERAD of TRPP2. Dysequilibrium between TRPP2 and PRKCSH may lead to cyst formation in PCLD patients with PRKCSH mutations, and thereby account for the overlapping manifestations observed in PCLD and autosomal dominant polycystic kidney disease.