Neuronal polarity relies on the selective localization of cargo to axons or dendrites. The molecular motor kinesin-1 moves cargo into axons but is also active in dendrites. This raises the question of how kinesin-1 activity is regulated to maintain the compartment-specific localization of cargo. Our in vivo structure–function analysis of endogenous Drosophila melanogaster kinesin-1 reveals a novel role for autoinhibition in enabling the dendrite-specific localization of Golgi outposts. Mutations that disrupt kinesin-1 autoinhibition result in the axonal mislocalization of Golgi outposts. Autoinhibition also regulates kinesin-1 localization. Uninhibited kinesin-1 accumulates in axons and is depleted from dendrites, correlating with the change in outpost distribution and dendrite growth defects. Genetic interaction tests show that a balance of kinesin-1 inhibition and dynein activity is necessary to localize Golgi outposts to dendrites and keep them from entering axons. Our data indicate that kinesin-1 activity is precisely regulated by autoinhibition to achieve the selective localization of dendritic cargo.