Mutations in polycystin-1 (PC1) give rise to autosomal dominant polycystic kidney disease, an important and common cause of kidney failure. Despite its medical importance, the function of PC1 remains poorly understood. Here, we investigated the role of the intracellular polycystin-1, lipoxygenase, and α-toxin (PLAT) signature domain of PC1 using nuclear magnetic resonance, biochemical, cellular, and in vivo functional approaches. We found that the PLAT domain targets PC1 to the plasma membrane in polarized epithelial cells by a mechanism involving the selective binding of the PLAT domain to phosphatidylserine and l-α-phosphatidylinositol-4-phosphate (PI4P) enriched in the plasma membrane. This process is regulated by protein kinase A phosphorylation of the PLAT domain, which reduces PI4P binding and recruits β-arrestins and the clathrin adaptor AP2 to trigger PC1 internalization. Our results reveal a physiological role for the PC1-PLAT domain in renal epithelial cells and suggest that phosphorylation-dependent internalization of PC1 is closely linked to its function in renal development and homeostasis.