Sphingolipids are abundant membrane components and important signaling molecules in eukaryotic cells. Their levels and localization are tightly regulated. However, the mechanisms underlying this regulation remain largely unknown. In this study, we identify the Golgi-associated retrograde protein (GARP) complex, which functions in endosome-to-Golgi retrograde vesicular transport, as a critical player in sphingolipid homeostasis. GARP deficiency leads to accumulation of sphingolipid synthesis intermediates, changes in sterol distribution, and lysosomal dysfunction. A GARP complex mutation analogous to a VPS53 allele causing progressive cerebello-cerebral atrophy type 2 (PCCA2) in humans exhibits similar, albeit weaker, phenotypes in yeast, providing mechanistic insights into disease pathogenesis. Inhibition of the first step of de novo sphingolipid synthesis is sufficient to mitigate many of the phenotypes of GARP-deficient yeast or mammalian cells. Together, these data show that GARP is essential for cellular sphingolipid homeostasis and suggest a therapeutic strategy for the treatment of PCCA2. DOI: http://dx.doi.org/10.7554/eLife.08712.001, eLife digest Every cell is enveloped by a membrane that forms a barrier between the cell and its environment. This membrane contains fat molecules called ‘sphingolipids’, which help to maintain the structure of the membrane and enable it to work correctly. These molecules are also used as signals to send information around the interior of the cell and are required for the cell to grow and divide normally. The levels of sphingolipids in the membrane have to be tightly controlled because any imbalance can cause stress to the cell and can lead to serious diseases. Sphingolipids are made inside the cell and are then sent to a compartment called the Golgi before being delivered to the membrane. To regulate the amount of sphingolipids in the membrane, these molecules are routinely returned to the interior of the cell in small structures called endosomes. From here, they can either be broken down or recycled back to the membrane via the Golgi. A group of proteins known as the Golgi-associated retrograde protein complex (or GARP) is involved in the movement of endosomes from the membrane to the Golgi. People that have a mutation in the gene that encodes GARP suffer from a severe neurodegenerative disease known as ‘progressive cerebello-cerebral atrophy type 2’ (PCCA2) in which brain cells die prematurely. Researchers have assumed that the most important role of GARP is to sort proteins, and that the missorting of proteins leads to PCCA2. Here, Frohlich et al. used a combination of genetic analysis and biochemical techniques to study GARP in yeast cells. The experiments show that GARP is critical for sphingolipid recycling, and that a lack of GARP leads to more sphingolipids being degraded, which results in a build-up of toxic molecules. Frohlich et al. generated yeast cells that have the same mutations in the gene that encodes GARP as those in human patients with PCCA2. These cells grew much slower than normal yeast and were less able to transport sphingolipids from the endosome to the Golgi. Like the yeast cells, human cells in which the gene that encodes GARP was less active also accumulated toxic molecules. Together, these findings suggest that a build-up of toxic fat molecules may be responsible for the symptoms observed in PCCA2 patients. A future challenge is to find out whether this also applies to patients with Alzheimer's disease and other conditions that also affect endosomes. DOI: http://dx.doi.org/10.7554/eLife.08712.002