The nuclear distribution protein E (NudE) and nuclear distribution protein E-like (Nudel or Ndel1) interact with both lissencephaly 1 (Lis1) and dynein. These interactions are thought to be essential for dynein function. Previous studies have shown that the highly conserved N terminus of NudE/Nudel directly binds to Lis1, and such binding is critical for dynein activity. By contrast, although the C terminus of NudE/Nudel was reported to bind to dynein, the functional significance of this binding has remained unclear. Using the sperm-mediated spindle assembly assay in Xenopus egg extracts and extensive mutagenesis studies, we have identified a highly conserved dynein binding domain within the first 80 amino acids of Nudel. We further demonstrate that the dynein intermediate chain in the dynein complex is directly involved in this interaction. Importantly, we show that both the dynein and Lis1 binding domains of Nudel are required for spindle pole organization. Finally, we report that spindle defects caused by immuno-depletion of Nudel could be rescued by a 1-fold increase of Lis1 concentration in Xenopus egg extracts. This suggests that an important function of the N terminus of Nudel is to facilitate the interaction between Lis1 and dynein during spindle assembly. Together, our findings open up new avenues to further decipher the mechanism of dynein regulation by Nudel and Lis1.