The polyglutamine-binding protein 1 (PQBP1) has been linked to several X-linked intellectual disability disorders and progressive neurodegenerative diseases. While it is currently known that PQBP1 localizes in nuclear speckles and is engaged in transcription and splicing, we have now identified a cytoplasmic pool of PQBP1. Analysis of PQBP1 complexes revealed six novel interacting proteins, namely the RNA-binding proteins KSRP, SFPQ/PSF, DDX1 and Caprin-1, and two subunits of the intracellular transport-related dynactin complex, p150(Glued) and p27. PQBP1 protein complex formation is dependent on the presence of RNA. Immunofluorescence studies revealed that in primary neurons, PQBP1 co-localizes with its interaction partners in specific cytoplasmic granules, which stained positive for RNA. Our results suggest that PQBP1 plays a role in cytoplasmic mRNA metabolism. This is further supported by the partial co-localization and interaction of PQBP1 with the fragile X mental retardation protein (FMRP), which is one of the best-studied proteins found in RNA granules. In further studies, we show that arsenite-induced oxidative stress caused relocalization of PQBP1 to stress granules (SGs), where PQBP1 co-localizes with the new binding partners as well as with FMRP. Additional results indicated that the cellular distribution of PQBP1 plays a role in SG assembly. Together these data demonstrate a role for PQBP1 in the modulation of SGs and suggest its involvement in the transport of neuronal RNA granules, which are of critical importance for the development and maintenance of neuronal networks, thus illuminating a route by which PQBP1 aberrations might influence cognitive function.