Emerging evidence supports the idea that a signaling pathway containing orthologs of at least mammalian NudE and Nudel, Lis1, and cytoplasmic dynein is conserved for eukaryotic nuclear migration. In mammals, this pathway has profound impact on neuronal migration during development of the central nervous system. Lis1 and dynein are also involved in other cellular functions, such as mitosis. Here we show that Nudel also participates in a subset of dynein function in M phase. Nudel was specifically phosphorylated in M phase in its serine/threonine phosphorylation motifs, probably by Cdc2 and also Erk1 and -2. A fraction of Nudel bound to centrosomes strongly in interphase and localized to mitotic spindles in early M phase. By using mutants incapable of or simulating phosphorylation, we confirmed that phosphorylation of Nudel regulated the cell-cycle-dependent distribution, possibly by increasing its dissociation rate at the microtubule-organizing center. Moreover, phosphorylated Nudel or the phosphorylation-mimicking mutant bound Lis1 more efficiently. We further demonstrated that a Nudel mutant incapable of binding to Lis1 impaired the poleward movement of dynein and hence the dynein-mediated transport of kinetochore proteins to spindle poles along microtubules, a process contributing to inactivation of the spindle checkpoint in mitosis. These results point to the importance of Nudel-Lis1 interaction for the dynein activity in M phase and to a possible role of Nudel phosphorylation as facilitating such interaction. In addition, comparative studies suggest that NudE is also functionally related to its paralog, Nudel.