The inner and outer layers of COPII mediate cargo sorting and vesicle biogenesis. Sec16A and p125A (officially known as SEC23IP) proteins interact with both layers to control coat activity, yet the steps directing functional assembly at ER exit sites (ERES) remain undefined. By using temperature blocks, we find that Sec16A is spatially segregated from p125A-COPII-coated ERES prior to ER exit at a step that required p125A. p125A used lipid signals to control ERES assembly. Within p125A, we defined a C-terminal DDHD domain found in phospholipases and PI transfer proteins that recognized PA and phosphatidylinositol phosphates in vitro and was targeted to PI4P-rich membranes in cells. A conserved central SAM domain promoted self-assembly and selective lipid recognition by the DDHD domain. A basic cluster and a hydrophobic interface in the DDHD and SAM domains, respectively, were required for p125A-mediated functional ERES assembly. Lipid recognition by the SAM-DDHD module was used to stabilize membrane association and regulate the spatial segregation of COPII from Sec16A, nucleating the coat at ERES for ER exit.