TMEM165 has recently been identified as a novel protein involved in CDG-II. TMEM165 has no biological function described so far. Different mutations were recently found in patients with Golgi glycosylation defects and harboring a peculiar skeletal phenotype. In this study, we examined the effect of naturally occurring mutations on the intracellular localization of TMEM165 and their abilities to complement the TMEM165-deficient yeast, gdt1▵. Wild-type TMEM165 was present within Golgi compartment, plasma membrane and late endosomes/lysosomes, whereas mutated TMEM165 were found differentially localized according to the mutations. We demonstrated that, in the yeast functional assay with TMEM165 ortholog Gdt1, the homozygous point mutation correlating with a mild phenotype restores the yeast functional assay, whereas the truncated mutation, associated with severe disease, failed to restore Gdt1 function. These studies highly suggest that these clinically relevant point mutations do not affect the protein function but critically changes the subcellular protein localization. Moreover, the data point to a critical role of the YNRL motif in TMEM165 subcellular localization.