The development and homeostasis of neurons relies heavily on the selective targeting of vesicles into axon and dendrites. Microtubule-based motor proteins play an important role in polarized transport; however, the sorting mechanism to exclude dendritic cargo from the axon is unclear. We show that the dynein regulator NDEL1 controls somatodendritic cargo transport at the axon initial segment (AIS). NDEL1 localizes to the AIS via an interaction with the scaffold protein Ankyrin-G. Depletion of NDEL1 or its binding partner LIS1 results in both cell-wide and local defects, including the non-polarized trafficking of dendritic cargo through the AIS. We propose a model in which LIS1 is a critical mediator of local NDEL1-based dynein activation at the AIS. By localizing to the AIS, NDEL1 facilitates the reversal of somatodendritic cargos in the proximal axon.