Scy1-like 1 (Scyl1), a member of the Scy1-like family of catalytically inactive protein kinases, was recently identified as the gene product altered in muscle-deficient mice, which suffer from motor neuron degeneration and cerebellar atrophy. To determine the function of Scyl1, we have now used a mass spectrometry-based screen to search for Scyl1-binding partners and identified components of coatomer I (COPI) coats. The interaction was confirmed in pull-down assays, and Scyl1 co-immunoprecipitates with betaCOP from brain lysates. Interestingly, and unique for a non-transmembrane domain protein, Scyl1 binds COPI coats using a C-terminal RKLD-COO(-) sequence, similar to the KKXX-COO(-) COPI-binding motif found in transmembrane endoplasmic reticulum (ER) proteins. Scyl1 co-localizes with betaCOP and is localized, in an Arf1-independent manner, to the ER-Golgi intermediate compartment and the cis-Golgi, sites of COPI-mediated membrane budding. The localization and binding properties of Scyl1 strongly suggest a function in COPI transport, and inhibitory RNA-mediated knock down of the protein disrupts COPI-mediated retrograde traffic of the KDEL receptor to the ER without affecting anterograde traffic from the ER. Our data demonstrate a function for Scyl1 as an accessory factor in COPI trafficking and suggest for the first time that alterations in the COPI pathway result in neurodegenerative disease.