p150 Glued is the major subunit of dynactin, a complex that functions with dynein in minus-end-directed microtubule transport. Mutations within the p150 Glued CAP-Gly microtubule-binding domain cause neurodegenerative diseases through an unclear mechanism. A p150 Glued motor neuron degenerative disease-associated mutation introduced into the Drosophila Glued locus generates a partial loss-of-function allele (Gl G38S) with impaired neurotransmitter release and adult-onset locomotor dysfunction. Disruption of the p150 Glued CAP-Gly domain in neurons causes a specific disruption of vesicle trafficking at terminal boutons (TBs), the distal-most ends of synapses. Gl G38S larvae accumulate endosomes along with dynein and kinesin motor proteins within swollen TBs, and genetic analyses show that kinesin and p150 Glued function cooperatively at TBs to coordinate transport. Therefore, the p150 Glued CAP-Gly domain regulates dynein-mediated retrograde transport at synaptic termini, and this function of dynactin is disrupted by a mutation that causes motor neuron disease. Lloyd et al. find that mutations in the the CAP-Gly microtubule plus-end-binding domain of the dynactin subunit p150 Glued coordinate kinesin-mediated anterograde and dynein-mediated retrograde transport at distal ends of synapses at the Drosophila NMJ.