The lipid phosphatase Sac1 cycles between endoplasmic reticulum and cisternal Golgi compartments. In proliferating mammalian cells, a canonical dilysine motif at the C-terminus of Sac1 is required for coatomer complex-I (COP-I)-binding and continuous retrieval to the ER. Starvation triggers accumulation of Sac1 at the Golgi. The mechanism responsible for Golgi retention of Sac1 is unknown. Here we show that the first of the two transmembrane regions in human SAC1 (TM1) functions in Golgi localization. A minimal construct containing only TM1 and the adjacent flanking sequences is concentrated at the Golgi. Transplanting TM1 into transferrin receptor 2 (TfR2) induces Golgi accumulation of this normally plasma membrane and endosomal protein, indicating that TM1 is sufficient for Golgi localization. In addition, we determined that the N-terminal cytoplasmic domain of SAC1 also promotes Golgi localization, even when TM1 is mutated or absent. We conclude that the distribution of SAC1 within the Golgi is controlled via both passive membrane thickness-dependent partitioning of TM1 and a retention mechanism that requires the N-terminal cytoplasmic region.