Fibrocystin/Polyductin (FPC), encoded by PKHD1, is associated with autosomal recessive polycystic kidney disease (ARPKD), yet its precise role in cystogenesis remains unclear. Here we show that FPC undergoes complex proteolytic processing in developing kidneys, generating three soluble C-terminal fragments (ICDs). Notably, ICD15, contains a novel mitochondrial targeting sequence at its N-terminus, facilitating its translocation into mitochondria. This enhances mitochondrial respiration in renal epithelial cells, partially restoring impaired mitochondrial function caused by FPC loss. FPC inactivation leads to abnormal ultrastructural morphology of mitochondria in kidney tubules without cyst formation. Moreover, FPC inactivation significantly exacerbates renal cystogenesis and triggers severe pancreatic cystogenesis in a Pkd1 mouse mutant Pkd1V/V in which cleavage of Pkd1-encoded Polycystin-1 at the GPCR Proteolysis Site is blocked. Deleting ICD15 enhances renal cystogenesis without inducing pancreatic cysts in Pkd1V/V mice. These findings reveal a direct link between FPC and a mitochondrial pathway through ICD15 cleavage, crucial for cystogenesis mechanisms.