Heterozygosity for human polycystic kidney and hepatic disease 1 (PKHD1) mutations was recently associated with cystic liver disease and radiographic findings resembling medullary sponge kidney (MSK). However, the relevance of these associations has been tempered by a lack of cystic liver or renal disease in heterozygous mice carrying Pkhd1 gene trap or exon deletions. To determine whether heterozygosity for a smaller Pkhd1 defect can trigger cystic renal disease in mice, we generated and characterized mice with the predicted truncating Pkhd1C642∗ mutation in a region corresponding to the middle of exon 20 cluster of five truncating human mutations (between PKHD1G617fs and PKHD1G644∗). Mouse heterozygotes or homozygotes for the Pkhd1C642∗ mutation did not have noticeable liver or renal abnormalities on magnetic resonance images during their first weeks of life. However, when aged to ∼1.5 yr, the Pkhd1C642∗ heterozygotes developed prominent cystic liver changes; tissue analyses revealed biliary cysts and increased number of bile ducts without signs of congenital hepatic fibrosis-like portal field inflammation and fibrosis that was seen in Pkhd1C642∗ homozygotes. Interestingly, aged female Pkhd1C642∗ heterozygotes, as well as homozygotes, developed radiographic changes resembling MSK. However, these changes correspond to proximal tubule ectasia, not an MSK-associated collecting duct ectasia. In summary, by demonstrating that cystic liver and kidney abnormalities are triggered by heterozygosity for the Pkhd1C642∗ mutation, we provide important validation for relevant human association studies. Together, these investigations indicate that PKHD1 mutation heterozygosity (predicted frequency 1 in 70 individuals) is an important underlying cause of cystic liver disorders and MSK-like manifestations in a human population.