Epithelial cells establish apical and basolateral (BL) membranes with distinct protein and lipid compositions. To achieve this spatial asymmetry, the cell utilizes a variety of mechanisms for differential sorting, delivery and retention of cell surface proteins. The EGF receptor (EGFR) and its ligand, amphiregulin (AREG), are transmembrane proteins delivered to the BL membrane in polarized epithelial cells. Herein, we show that the cytoplasmic domain of AREG (ACD) contains dominant BL sorting information; replacement of the cytoplasmic domain of apically targeted nerve growth factor receptor with the ACD redirects the chimera to the BL surface. Using sequential truncations and site-directed mutagenesis of the ACD, we identify a novel BL sorting motif consisting of a single leucine C-terminal to an acidic cluster (EEXXXL). In adaptor protein (AP)-1B-deficient cells, newly synthesized AREG is initially delivered to the BL surface as in AP-1B-expressing cells. However, in these AP-1B-deficient cells, recycling of AREG back to the BL surface is compromised, leading to its appearance at the apical surface. These results show that recycling, but not delivery, of AREG to the BL surface is AP-1B dependent.