The endoplasmic reticulum (ER)-Golgi sterol transfer activity of oxysterol-binding protein (OSBP) regulates sphingomyelin (SM) synthesis, as well as post-Golgi cholesterol efflux pathways. The phosphorylation and ER-Golgi localization of OSBP are correlated, suggesting this modification regulates the directionality and/or specificity of transfer activity. In this paper, we report that phosphorylation on two serine-rich motifs, S381-S391 (site 1) and S192, S195, S200 (site 2), specifically controls OSBP activity at the ER. A phosphomimetic of the SM/cholesterol-sensitive phosphorylation site 1 (OSBP-S5E) had increased in vitro cholesterol and 25-hydroxycholesterol-binding capacity, and cholesterol extraction from liposomes, but reduced transfer activity. Phosphatidylinositol 4-phosphate (PI(4)P) and cholesterol competed for a common binding site on OSBP; however, direct binding of PI(4)P was not affected by site 1 phosphorylation. Individual site 1 and site 2 phosphomutants supported oxysterol activation of SM synthesis in OSBP-deficient CHO cells. However, a double site1/2 mutant (OSBP-S381A/S3D) was deficient in this activity and was constitutively colocalized with vesicle-associated membrane protein-associated protein A (VAP-A) in a collapsed ER network. This study identifies phosphorylation regulation of sterol and VAP-A binding by OSBP in the ER, and PI(4)P as an alternate ligand that could be exchanged for sterol in the Golgi apparatus.