There have been remarkable advances in research on polycystic liver and kidney diseases recently, covering cloning of new genes, refining disease classifications, and advances in understanding more about the molecular pathology of these diseases. Autosomal dominant polycystic kidney disease (ADPKD) is the most common hereditary disease affecting kidneys. It affects 1/400 to 1/1000 live births and accounts for 5% of the end stage renal disease in the United States and Europe, and is caused by gene defects in the PKD1 or PKD2 genes. Compared to ADPKD, polycystic liver disease (PCLD) is a milder disease and does not lower life expectancy. Both diseases are usually adult-onset diseases. Defects in genes, which code the hepatocystin and SEC63 proteins, have just recently been found to cause PCLD. It now seems that ADPKD is caused by malfunction of the primary cilia, a cell organ sensing fluid movement, and that PCLD is a sequel from defects in protein processing. Autosomal recessive polycystic kidney disease (ARPKD) belongs to a group of congenital hepatorenal fibrocystic syndromes. All ARPKD patients have a gene defect in a gene called PKHD1, the protein product of which localizes to primary cilia. We summarize the present clinical and molecular knowledge of these diseases in this review.