The small GTPase Arl8 has emerged as a major regulatory GTPase on lysosomes. Studies in mammalian cells have shown that it regulates both fusion with late endosomes and also lysosomal motility. In its active, GTP-bound, state it recruits to lysosomes the HOPS endosomal tethering complex and also proteins that link lysosomes to microtubule motors such as the kinesin adaptor PLEKHM2. To gain further insights into Arl8 biology we examined the single Drosophila ortholog. Drosophila Arl8 is essential for viability, and mitotic clones of mutant cells are able to continue to divide but show perturbation of the late endocytic pathway. Progeny lacking Arl8 die as late larvae with movement paralysis characteristic of defects in neuronal function. This phenotype was rescued by expression of Arl8 in motor neurons. Examination of these neurons in the mutant larvae revealed smaller synapses and axons with elevated levels of carriers containing synaptic components. Affinity chromatography revealed binding of Drosophila Arl8 to the HOPS complex, and to the Drosophila ortholog of RILP, a protein that in mammals recruits dynein to late endosomes, with dynein being known to be required for neuronal transport. Thus Drosophila Arl8 controls late endocytic function and transport via at least two distinct effectors.