Abnormal axonal transport is associated with neuronal disease. We identified a role for DHC-1, the C. elegans dynein heavy chain, in maintaining neuronal cargo distribution. Surprisingly, this does not involve dynein's role as a retrograde motor in cargo transport, hinging instead on its ability to inhibit microtubule (MT) dynamics. Neuronal MTs are highly static, yet the mechanisms and functional significance of this property are not well understood. In disease-mimicking dhc-1 alleles, excessive MT growth and collapse occur at the dendrite tip, resulting in the formation of aberrant MT loops. These unstable MTs act as cargo traps, leading to ectopic accumulations of cargo and reduced availability of cargo at normal locations. Our data suggest that an anchored dynein pool interacts with plus-end-out MTs to stabilize MTs and allow efficient retrograde transport. These results identify functional significance for neuronal MT stability and suggest a mechanism for cellular dysfunction in dynein-linked disease.