Dyggve-Melchior-Clausen dysplasia (DMC) is a rare inherited dwarfism with severe mental retardation due to mutations in the DYM gene which encodes Dymeclin, a 669-amino acid protein of yet unknown function. Despite a high conservation across species and several predicted transmembrane domains, Dymeclin could not be ascribed to any family of proteins. Here we show, using in situ hybridization, that DYM is widely expressed in human embryos, especially in the cortex, the hippocampus and the cerebellum. Both the endogenous and the recombinant protein fused to green fluorescent protein co-localized with Golgi apparatus markers. Electron microscopy revealed that Dymeclin associates with the Golgi apparatus and with transitional vesicles of the reticulum-Golgi interface. Moreover, permeabilization assays revealed that Dymeclin is not a transmembrane but a peripheral protein of the Golgi apparatus as it can be completely released from the Golgi after permeabilization of the plasma membrane. Time lapse confocal microscopy experiments on living cells further showed that the protein shuttles between the cytosol and the Golgi apparatus in a highly dynamic manner and recognizes specifically a subset of mature Golgi membranes. Finally, we found that DYM mutations associated with DMC result in mis-localization and subsequent degradation of Dymeclin. These data indicate that DMC results from a loss-of-function of Dymeclin, a novel peripheral membrane protein which shuttles rapidly between the cytosol and mature Golgi membranes and point out a role of Dymeclin in cellular trafficking.