Mutations in unc-46 in Caenorhabditis elegans cause defects in all behaviors that are mediated by GABA. Here we show that UNC-46 is a sorting factor that localizes the vesicular GABA transporter to synaptic vesicles. The UNC-46 protein is related to the LAMP (lysosomal associated membrane protein) family of proteins and is localized at synapses. In unc-46 mutants, the vesicular transporter is not found specifically in synaptic vesicles but rather is diffusely spread along the axon. Mislocalization of the transporter severely reduces the frequency of miniature currents, but the remaining currents are normal in amplitude. Because the number of synaptic vesicles is not depleted, it is likely that only a fraction of vesicles harbor the transporter in unc-46 mutants. Our data indicate that the transporter and UNC-46 have mutual roles in sorting. The vesicular GABA transporter recruits UNC-46 to synaptic vesicle precursors in the cell body, and UNC-46 sorts the transporter at the cell body and during endocytosis at the synapse.