Cellular protein phosphorylation regulates proteolytic processing of the Alzheimer's Amyloid Precursor Protein (APP). This appears to occur both indirectly and directly via APP phosphorylation at residues within cytoplasmic motifs related to targeting and protein-protein interactions. The sorting signal (653)YTSI(656) comprises the S655 residue that can be phosphorylated by PKC, particularly in mature APP molecules. The YTSI domain has been associated with APP internalization and Golgi polarized sorting, but no functional significance has been attributed to S655 phosphorylation thus far. Using APP(695)-GFP S655 phosphomutants we show that S655 phosphorylation is a signal that positively modulates APP secretory traffic. The phosphomimicking and dephosphomimicking S655 mutants exhibited contrasting Golgi dynamics, which correlated with differential Golgi vesicular exit and secretory cleavage to sAPP. The role of S655 phosphorylation in APP trafficking at sorting stations, such as the Golgi, its contribution toward cytoprotective alpha sAPP production, and implications for Alzheimer's disease are discussed.