Drug resistance poses a great challenge to targeted cancer therapies. In Hedgehog pathway-dependent cancers, the scope of mechanisms enabling resistance to Smo-inhibitors is not known. Here, we performed a transposon mutagenesis screen in medulloblastoma and identified multiple modes of resistance. Surprisingly, mutations in ciliogenesis genes represent a frequent cause of resistance, and patient datasets indicate that cilia loss constitutes a clinically relevant category of resistance. Conventionally, primary cilia are thought to enable oncogenic Hedgehog signaling. Paradoxically, we find that cilia loss protects tumor cells from susceptibility to Smo-inhibitors and maintains a "persister" state that depends on continuous low output of the Hedgehog program. Persister cells can serve as a reservoir for further tumor evolution, as additional alterations synergize with cilia loss to generate aggressive recurrent tumors. Together, our findings reveal novel patterns of resistance and provide mechanistic insights for the role of cilia in tumor evolution and drug resistance.