Correct targeting of proteins to axons and dendrites is crucial for neuronal function. We showed previously that axonal accumulation of the cell adhesion molecule L1/neuron-glia cell adhesion molecule (NgCAM) depends on endocytosis (Wisco, D., E.D. Anderson, M.C. Chang, C. Norden, T. Boiko, H. Folsch, and B. Winckler. 2003. J. Cell Biol. 162:1317-1328). Two endocytosis-dependent pathways to the axon have been proposed: transcytosis and selective retrieval/retention. We show here that axonal accumulation of L1/NgCAM occurs via nondegradative somatodendritic endosomes and subsequent anterograde axonal transport, which is consistent with transcytosis. Additionally, we identify the neuronal-specific endosomal protein NEEP21 (neuron-enriched endosomal protein of 21 kD) as a regulator of L1/NgCAM sorting in somatodendritic endosomes. Down-regulation of NEEP21 leads to missorting of L1/NgCAM to the somatodendritic surface as well as to lysosomes. Importantly, the axonal accumulation of endogenous L1 in young neurons is also sensitive to NEEP21 depletion. We propose that small endosomal carriers derived from somatodendritic recycling endosomes can serve to redistribute a distinct set of membrane proteins from dendrites to axons.