Intracellular transport is best understood for how proteins are shuttled among different compartments of the secretory pathway by membrane-bound transport carriers. However, it remains unclear whether regulation of this transport is modulated by the transported (cargo) proteins in the lumen of transport pathways. In the early secretory pathways that connect the endoplasmic reticulum (ER) and the Golgi complex, the small GTPase ADP-ribosylation factor 1 (ARF1) recruits a cytosolic coat protein complex named COPI onto membranes as a key step in the formation of transport vesicles. Transport of newly synthesized proteins that leave the ER includes a class of cargo proteins with a sequence motif of KDEL. When these KDEL proteins leave the ER to reach the Golgi complex, they are recognized by their receptor and transported retrograde in COPI-coated vesicles back to the ER. We now demonstrate that stimulation of the KDEL receptor by a KDEL protein enhances an interaction between the KDEL receptor and a GTPase-activating protein for ARF1. As a result, more cytosolic GTPase-activating protein is recruited to membranes to inactivate ARF1. Thus, the KDEL proteins are examples of luminal cargo proteins that regulate transport by activating their receptor. Most likely, this regulation affects retrograde transport from the Golgi complex to the ER, as activated KDEL receptor appears to reside only in retrograde COPI-coated vesicles.