Subcellular localization of ion channels is crucial for the transmission of electrical signals in the nervous system. Here we show that Discs-Large (DLG), a member of the MAGUK (membrane-associated guanylate kinases) family in Drosophila, co-localizes with Shaker potassium channels (Sh Kch) in most synaptic areas of the adult brain and in the outer membrane of photoreceptors. However, DLG is absent from axonal tracts in which Sh channels are concentrated. Truncation of the C-terminal of Sh (including the PDZ binding site) disturbs its pattern of distribution in both CNS and retina, while truncation of the guanylate kinase/C-terminal domain of DLG induces ectopic localization of these channels to neuronal somata in the CNS, but does not alter the distribution of channels in photoreceptors. Immunocytochemical, membrane fractionation and detergent solubilization analysis indicate that the C-terminal of Sh Kch is required for proper trafficking to its final destination. Thus, several major conclusions emerge from this study. First, DLG plays a major role in the localization of Sh channels in the CNS and retina. Second, localization of DLG in photoreceptors but not in the CNS seems to depend on its interaction with Sh. Third, the guanylate kinase/C-terminal domain of DLG is involved in the trafficking of Shaker channels but not of DLG in the CNS. Fourth, different mechanisms for the localization of Sh Kch operate in different cell types.