Arl/ARF GTPases regulate ciliary trafficking, but their tissue-specific functions are unclear. Here, we demonstrate that ciliary GTPase Arl3 is required for mitotic spindle orientation of mouse basal stem cells during skin development. Arl3 loss diminished cell divisions within the plane of the epithelium, leading to increased perpendicular divisions, expansion of progenitor cells and loss of epithelial integrity. These observations suggest that an Arl3-dependent mechanism maintains cell division polarity along the tissue axis, and disruption of planar spindle orientation has detrimental consequences for epidermal architecture. Defects in planar cell polarity (PCP) can disrupt spindle positioning during tissue morphogenesis. Upon Arl3 loss, the PCP signaling molecules Celsr1 and Vangl2 failed to maintain planar polarized distributions, resulting in defective hair follicle angling, a hallmark of disrupted PCP. In the absence of Celsr1 polarity, frizzled 6 lost its asymmetrical distribution and abnormally segregated to the apical cortex of basal cells. We propose that Arl3 regulates polarized endosomal trafficking of PCP components to compartmentalized membrane domains. Cell-cell communication via ciliary GTPase signaling directs mitotic spindle orientation and PCP signaling, processes that are crucial for the maintenance of epithelial architecture.