Background: Retrograde transport of several transmembrane proteins from endosomes to the trans-Golgi network (TGN) occurs via Rab 5-containing endosomes, mediated by clathrin and the recently characterized retromer complex. This complex and one of its putative sorting receptor components, SorLA, were reported to be associated to late onset Alzheimer's disease (AD). The pathogenesis of this neurodegenerative disorder is still elusive, although accumulation of amyloidogenic Abeta is a hallmark. This peptide is generated from the sucessive β- and γ- secretase proteolysis of the Alzheimer's amyloid precursor protein (APP), events which are associated with endocytic pathway compartments. Therefore, APP targeting and time of residence in endosomes would be predicted to modulate Abeta levels. However, the formation of an APP- and retromer-containing protein complex with potential functions in retrieval of APP from the endosome to the TGN had, to date, not been demonstrated directly. Further, the motif(s) in APP that regulate its sorting to the TGN have not been characterized. Results: Through the use of APP-GFP constructs, we show that APP containing endocytic vesicles targeted for the TGN, are also immunoreactive for clathrin-, Rab 5- and VPS35. Further, they frequently generate protruding tubules near the TGN, supporting an association with a retromer-mediated pathway. Importantly, we show for the first time, that mimicking APP phosphorylation at S655, within the APP 653YTSI656 basolateral motif, enhances APP retrieval via a retromer-mediated process. The phosphomimetic APP S655E displays decreased APP lysosomal targeting, enhanced mature half-life, and decreased tendency towards Abeta production. VPS35 downregulation impairs the phosphorylation dependent APP retrieval to the TGN, and decreases APP half-life. Conclusions: We reported for the first time the importance of APP phosphorylation on S655 in regulating its retromer-mediated sorting to the TGN or lysosomes. Significantly, the data are consistent with known interactions involving the retromer, SorLA and APP. Further, these findings add to our understanding of APP targeting and potentially contribute to our knowledge of sporadic AD pathogenesis representing putative new targets for AD therapeutic strategies.