The AP-1 complex recycles between membranes and the cytoplasm and dissociates from membranes during clathrin-coated-vesicle uncoating, but also independently of vesicular transport. The μ1A N-terminal 70 amino acids are involved in regulating AP-1 recycling. In a yeast two-hybrid library screen we identified the cytoplasmic prolyl-oligopeptidase-like protein PREPL as an interaction partner of this domain. PREPL overexpression leads to reduced AP-1 membrane binding, whereas reduced PREPL expression increases membrane binding and impairs AP-1 recycling. Altered AP-1 membrane binding in PREPL-deficient cells mirrors the membrane binding of the mutant AP-1* complex, which is not able to bind PREPL. Colocalisation of PREPL with residual membrane-bound AP-1 can be demonstrated. Patient cell lines deficient in PREPL have an expanded trans-Golgi network, which could be rescued by PREPL expression. These data demonstrate PREPL as an AP-1 effector that takes part in the regulation of AP-1 membrane binding. PREPL is highly expressed in brain and at lower levels in muscle and kidney. Its deficiency causes hypotonia and growth hormone hyposecretion, supporting essential PREPL functions in AP-1-dependent secretory pathways.