SorLA has been recognized as a novel sorting receptor that regulates trafficking and processing of the amyloid precursor protein (APP) and that represents a significant risk factor for sporadic Alzheimer disease. Here, we investigated the cellular mechanisms that control intracellular trafficking of sorLA and their relevance for APP processing. We demonstrate that sorLA acts as a retention factor for APP in trans-Golgi compartments/trans-Golgi network, preventing release of the precursor into regular processing pathways. Proper localization and activity of sorLA are dependent on functional interaction with GGA and PACS-1, adaptor proteins involved in protein transport to and from the trans-Golgi network. Aberrant targeting of sorLA to the recycling compartment or the plasma membrane causes faulty APP trafficking and imbalance in non-amyloidogenic and amyloidogenic processing fates. Thus, our findings identified altered routing of sorLA as a major cellular mechanism contributing to abnormal APP processing and enhanced amyloid beta-peptide formation.