Bone is a dynamic organ that is continuously modified during development, load-induced adaptation, and fracture repair. Understanding the cellular and molecular mechanisms for natural fracture healing can lead to therapeutics that enhance the quality of newly formed tissue, advance the rate of healing, or replace the need for invasive surgical procedures. Prx1-expressing cells in the periosteum are thought to supply the majority of osteoblasts and chondrocytes in the fracture callus, but the exact mechanisms for this behavior are unknown. The primary cilium is a sensory organelle that is known to mediate several signaling pathways involved in fracture healing and required for Prx1-expressing cells to contribute to juvenile bone development and adult load-induced bone formation. We therefore investigated the role of Prx1-expressing cell primary cilia in fracture repair by developing a mouse model that enabled us to simultaneously track Prx1 lineage cell fate and disrupt Prx1-expressing cell primary cilia in vivo. The cilium KO mice exhibited abnormally large calluses with significantly decreased bone formation and persistent cartilage nodules. Analysis of mRNA expression in the early soft callus revealed downregulation of osteogenesis, Hh signaling, and Wnt signaling, and upregulation of chondrogenesis and angiogenesis. The mutant mice also exhibited decreased Osx and Periostin but increased αSMA and PECAM-1 protein expression in the hard callus. We further used a Gli1^LacZ reporter and found that Hh signaling was significantly upregulated in the mutant callus at later stages of healing. Interestingly, altered protein expression and Hh signaling did not correlate with labeled Prx1-lineage cells, suggesting loss of cilia altered Hh signaling non-autonomously. Overall, cilium KO mice demonstrated severely delayed and incomplete fracture healing, and our findings suggest Prx1-expressing cell primary cilia are necessary to tune Hh signaling for proper fracture repair.