The exostosin (EXT) genes encode glycosyltransferases required for glycosaminoglycan chain polymerization in the biosynthesis of heparan sulfate proteoglycans (HSPGs). Mutations in the tumor suppressor genes EXT1 and EXT2 disturb HSPG biosynthesis and cause multiple osteochondroma (MO). How EXT1 and EXT2 traffic within the Golgi complex is not clear. Here, we show that Rotini (Rti), the Drosophila GOLPH3, regulates the retrograde trafficking of EXTs. A reduction in Rti shifts the steady-state distribution of EXTs to the trans-Golgi. These accumulated EXTs tend to be degraded and their re-entrance towards the route for polymerizing GAG chains is disengaged. Conversely, EXTs are mislocalized towards the transitional endoplasmic reticulum/cis-Golgi when Rti is overexpressed. Both loss of function and overexpression of rti result in incomplete HSPGs and perturb Hedgehog signaling. Consistent with Drosophila, GOLPH3 modulates the dynamic retention and protein stability of EXT1/2 in mammalian species. Our data demonstrate that GOLPH3 modulates the activities of EXTs, thus implicating a putative role for GOLPH3 in the formation of MO.