Significance Specific APOL1 variants are a strong risk factor for human kidney disease. Previous reports examining the intracellular localization of the APOL1 protein in kidney and glomerular podocytes have yielded inconsistent results. Here we demonstrate differential localization of wild-type and risk variant APOL1 polypeptides, with the wild type localizing predominantly to lipid droplets and risk variant forms localizing predominantly to the endoplasmic reticulum. We further demonstrate that the localization of risk variant APOL1 modulates cytotoxic effects, and that perturbations increasing lipid droplet localization of risk variant polypeptides decrease this cytotoxicity. These findings have significant implications for understanding the disease mechanism of APOL1-associated kidney disease and for development of new therapeutic approaches.