Cytoplasmic dynein is a large multisubunit complex involved in retrograde transport and the positioning of various organelles. Dynein light chain (LC) subunits are conserved across species; however, the molecular contribution of LCs to dynein function remains controversial. One model suggests that LCs act as cargo-binding scaffolds. Alternatively, LCs are proposed to stabilize the intermediate chains (ICs) of the dynein complex. To examine the role of LCs in dynein function, we used Saccharomyces cerevisiae, in which the sole function of dynein is to position the spindle during mitosis. We report that the LC8 homologue, Dyn2, localizes with the dynein complex at microtubule ends and interacts directly with the yeast IC, Pac11. We identify two Dyn2-binding sites in Pac11 that exert differential effects on Dyn2-binding and dynein function. Mutations disrupting Dyn2 elicit a partial loss-of-dynein phenotype and impair the recruitment of the dynein activator complex, dynactin. Together these results indicate that the dynein-based function of Dyn2 is via its interaction with the dynein IC and that this interaction is important for the interaction of dynein and dynactin. In addition, these data provide the first direct evidence that LC occupancy in the dynein motor complex is important for function.