sorLA is a sorting receptor for amyloid precursor protein (APP) genetically linked to Alzheimer's disease (AD). Retromer, an adaptor complex in the endosome-to-Golgi retrieval pathway, has been implicated in APP transport because retromer deficiency leads to aberrant APP sorting and processing and levels of retromer proteins are altered in AD. Here we report that sorLA and retromer functionally interact in neurons to control trafficking and amyloidogenic processing of APP. We have identified a sequence (FANSHY) in the cytoplasmic domain of sorLA that is recognized by the VPS26 subunit of the retromer complex. Accordingly, we characterized the interaction between the retromer complex and sorLA and determined the role of retromer on sorLA-dependent sorting and processing of APP. Mutations in the VPS26 binding site resulted in receptor redistribution to the endosomal network, similar to the situation seen in cells with VPS26 knockdown. The sorLA mutant retained APP-binding activity but, as opposed to the wild-type receptor, misdirected APP into a distinct non-Golgi compartment, resulting in increased amyloid processing. In conclusion, our data provide a molecular link between reduced retromer expression and increased amyloidogenesis as seen in patients with sporadic AD.