Dynein is a minus-end-directed microtubule motor with critical roles in mitosis, membrane transport and intracellular transport. Several proteins regulate dynein activity, including dynactin, LIS1 (refs 2, 3) and NudEL (NudE-like). Here, we identify a NUDEL homologue in budding yeast and name it Ndl1. The ndl1Δ null mutant shows decreased targeting of dynein to microtubule plus ends, an essential element of the model for dynein function. We find that Ndl1 regulates dynein targeting through LIS1, with which it interacts biochemically, but not through CLIP170, another plus-end protein involved in dynein targeting. Ndl1 is found at far fewer microtubule ends than are LIS1 and dynein. However, when Ndl1 is present at a plus end, the molar amount of Ndl1 approaches that of LIS1 and dynein. We propose a model in which Ndl1 binds transiently to the plus end to promote targeting of LIS1, which cooperatively recruits dynein.