Intracellular transduction of Hedgehog (Hh) signals in mammals requires functional primary cilia. The Hh signaling effectors, the Gli family of transcription factors, and their negative regulator, Suppressor of Fused (Sufu), accumulate at the tips of cilia; however, the molecular mechanism regulating this localization remains elusive. In the current study, we show that the ciliary localization of mammalian Gli proteins depends on both their N-terminal domains and a central region lying C-terminal to the zinc-finger DNA-binding domains. Invertebrate Gli homologs Ci and Tra1, when over-expressed in ciliated mouse fibroblasts, fail to localize to the cilia, suggesting the lack of a vertebrate-specific structural feature required for ciliary localization. We further show that activation of protein kinase A (PKA) efficiently inhibits ciliary localization of Gli2 and Gli3, but only moderately affects the ciliary localization of Gli1. Interestingly, variants of Gli2 mimicking the phosphorylated or non-phosphorylated states of Gli2 are both localized to the cilia, and their ciliary localizations are subjected to the inhibitory effect of PKA activation, suggesting a likely indirect mechanism underlying the roles of PKA in Gli ciliary localization. Finally, we show that ciliary localization of Sufu is dependent on ciliary-localized Gli proteins, and is inhibited by PKA activation, suggesting a coordinated mechanism for the ciliary translocation of Sufu and Gli proteins.