OSM-3 is a Kinesin-2 family member from Caenorhabditis elegans that is involved in intraflagellar transport (IFT), a process essential for the construction and maintenance of sensory cilia. In this study, using a single-molecule fluorescence assay, we show that bacterially expressed OSM-3 in solution does not move processively (multiple steps along a microtubule without dissociation) and displays low microtubule-stimulated adenosine triphosphatase (ATPase) activity. However, a point mutation (G444E) in a predicted hinge region of OSM-3's coiled-coil stalk as well as a deletion of that hinge activate ATPase activity and induce robust processive movement. These hinge mutations also cause a conformational change in OSM-3, causing it to adopt a more extended conformation. The motility of wild-type OSM-3 also can be activated by attaching the motor to beads in an optical trap, a situation that may mimic attachment to IFT cargo. Our results suggest that OSM-3 motility is repressed by an intramolecular interaction that involves folding about a central hinge and that IFT cargo binding relieves this autoinhibition in vivo. Interestingly, the G444E allele in C. elegans produces similar ciliary defects to an osm-3-null mutation, suggesting that autoinhibition is important for OSM-3's biological function.