Post-translational modifications of proteins are essential for cell function. Covalent modification by SUMO (small ubiquitin-like modifier) plays a role in multiple cell processes, including transcriptional regulation, DNA damage repair, protein localization and trafficking. Factors affecting protein localization and trafficking are particularly crucial in neurons because of their polarization, morphological complexity and functional specialization. SUMOylation has emerged as a major mediator of intranuclear and nucleo-cytoplasmic translocations of proteins involved in critical pathways such as circadian rhythm, apoptosis and protein degradation. In addition, SUMO-regulated re-localization of extranuclear proteins is required to sustain neuronal excitability and synaptic transmission. Thus, SUMOylation is a key arbiter of neuronal viability and function. Here, we provide an overview of recent advances in our understanding of regulation of neuronal protein localization and translocation by SUMO and highlight exciting areas of ongoing research.