Left-back Townsend, 20, has made one first-team appearance for Hull since progressing through the youth ranks and has had previous loan spells at Grimsby and Chesterfield.
"Conor has been out on loan before and has a lot of people saying a lot of good things about him," Carlisle manager Greg Abbott told the club's official website.
"He's keen to come here and make his mark at League One level and we think he's one who will do that.
"I spoke to Steve Agnew about him, at length, and he's a player who is very highly thought of.
"He's already shown at Grimsby and Chesterfield that he's hungry and his attitude earned him long spells with those clubs.
"He conquered both levels and this is a move which could be very positive for all concerned. He's definitely one we are looking forward to working with."