Alzheimer amyloid precursor protein (APP) is the precursor for the Abeta peptide involved in pathogenesis of Alzheimer's disease. The soluble ectodomain fragment of APP (sAPP) functions as a growth factor for epithelial cells, suggesting an important function for APP outside neuronal tissue. Previous studies have shown that in polarized epithelial cells, APP is targeted to the basolateral domain. Tyr653 within the cytoplasmic tail of APP mediates the basolateral targeting of APP, but the sorting machinery that binds to this residue has largely remained unknown. In this study, we analyzed the role of adaptor complexes in the polarized sorting of APP. We show that the medium subunit mu1B of the epithelia-specific adaptor protein (AP)-1B binds onto the cytoplasmic tail of APP in a Tyr653-dependent way. Moreover, ectopic expression of mu1B in cells lacking AP-1B resulted in correction of apical missorting of wild-type but not Tyr653Ala APP. Basolateral secretion of sAPP was found to be independent of Tyr653. We propose a model for polarized targeting of APP according to which sorting of APP to basolateral domain is dependent on binding of AP-1B on Tyr653 in basolateral endosomes. This model is in accordance with the current understanding of sorting mechanisms mediating polarized targeting of membrane proteins.