AP-1 and Gga adaptors participate in clathrin-mediated protein transport between the trans-Golgi network and endosomes. Both adaptors contain homologous domains that act to recruit accessory proteins involved in clathrin-coated vesicle formation, but the spectrum of known adaptor-binding partners is limited. This study describes an evolutionarily conserved protein of Saccharomyces cerevisiae, Laa1p (Yjl207cp), that interacts and functions specifically with AP-1. Deletion of LAA1, when combined with a conditional mutation in clathrin heavy chain or deletion of GGA genes, accentuated growth defects and increased disruption of clathrin-dependent alpha-factor maturation and transport of carboxypeptidase Y to the vacuole. In contrast, such genetic interactions were not observed between deletions of LAA1 and AP-1 subunit genes. Laa1p preferentially interacted with AP-1 compared with Gga proteins by glutathione S-transferase-fusion affinity binding and coimmunoprecipitations. Localization of AP-1 and Laa1p, but not Gga proteins, was highly sensitive to brefeldin A, an inhibitor of ADP-ribosylation factor (Arf) activation. Importantly, deletion of LAA1 caused mislocalization of AP-1, especially in cells at high density (postdiauxic shift), but it did not affect Gga protein distribution. Our results identify Laa1p as a new determinant of AP-1 localization, suggesting a model in which Laa1p and Arf cooperate to direct stable association of AP-1 with appropriate intracellular membranes.