The subcellular localization of membrane and secreted proteins is finely and dynamically regulated through intracellular vesicular trafficking for permitting various biological processes. Drosophila Amyloid precursor protein like (APPL) and Hikaru genki (HIG) are examples of proteins that show differential subcellular localization among several developmental stages.During the study of the localization mechanisms of APPL and HIG, we isolated a novel mutant of the gene, CG1973, which we named yata. This molecule interacted genetically with Appl and is structurally similar to mouse NTKL/SCYL1, whose mutation was reported to cause neurodegeneration. yata null mutants showed phenotypes that included developmental abnormalities, progressive eye vacuolization, brain volume reduction, and lifespan shortening. Exogenous expression of Appl or hig in neurons partially rescued the mutant phenotypes of yata. Conversely, the phenotypes were exacerbated in double null mutants for yata and Appl. We also examined the subcellular localization of endogenous APPL and exogenously pulse-induced APPL tagged with FLAG by immunostaining the pupal brain and larval motor neurons in yata mutants. Our data revealed that yata mutants showed impaired subcellular localization of APPL. Finally, yata mutant pupal brains occasionally showed aberrant accumulation of Sec23p, a component of the COPII coat of secretory vesicles traveling from the endoplasmic reticulum (ER) to the Golgi.We identified a novel gene, yata, which is essential for the normal development and survival of tissues. Loss of yata resulted in the progressive deterioration of the nervous system and premature lethality. Our genetic data showed a functional relationship between yata and Appl. As a candidate mechanism of the abnormalities, we found that yata regulates the subcellular localization of APPL and possibly other proteins.