Subcellular compartmentalization has become an important theme in cell signaling such as spatial regulation of Ras by RasGRP1 and MEK/ERK by Sef. Here, we report spatial regulation of Raf kinase by RKTG (Raf kinase trapping to Golgi). RKTG is a seven-transmembrane protein localized at the Golgi apparatus. RKTG expression inhibits EGF-stimulated ERK and RSK phosphorylation, blocks NGF-mediated PC12 cell differentiation, and antagonizes Ras- and Raf-1-stimulated Elk-1 transactivation. Through interaction with Raf-1, RKTG changes the localization of Raf-1 from cytoplasm to the Golgi apparatus, blocks EGF-stimulated Raf-1 membrane translocation, and reduces the interaction of Raf-1 with Ras and MEK1. In RKTG-null mice, the basal ERK phosphorylation level is increased in the brain and liver. In RKTG-deleted mouse embryonic fibroblasts, EGF-induced ERK phosphorylation is enhanced. Collectively, our results reveal a paradigm of spatial regulation of Raf kinase by RKTG via sequestrating Raf-1 to the Golgi apparatus and thereby inhibiting the ERK signaling pathway.