MyD88 is a cytoplasmic adaptor protein that is critical for Toll-like receptor (TLR) signaling. The subcellular localization of MyD88 is characterized as large condensed forms in the cytoplasm. The mechanism and significance of this localization with respect to the signaling function, however, are currently unknown. Here, we demonstrate that MyD88 localization depends on the entire non-TIR region and that the correct cellular targeting of MyD88 is indispensable for its signaling function. The Toll-interleukin I receptor-resistance (TIR) domain does not determine the subcellular localization, but it mediates interaction with specific TLRs. These findings reveal distinct roles for the TIR and non-TIR regions in the subcellular localization and signaling properties of MyD88.