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 somato-dendritic 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.