Membrane-tethered sterol-binding Lam/Ltc proteins localize at junctions between the endoplasmic reticulum (ER) membrane and other organelles. Two of the six family members—Lam2/Ltc4 (initially Ysp2) and paralog Lam4/Ltc3—localize to ER-plasma membrane (PM) contact sites (CSs) and mediate retrograde ergosterol transport from the PM to the ER. Our prior work demonstrated that Lam2 and Lam4 are substrates of TORC2-regulated protein kinase Ypk1, that Ypk1-mediated phosphorylation inhibits their function in retrograde sterol transport, and that PM sterol retention bolsters cell survival under stressful conditions. At ER-PM CSs, Lam2 and Lam4 associate with Laf1/Ymr102c and Dgr2/Ykl121w (paralogous WD40 repeat-containing proteins) that reportedly bind sterol. Using fluorescent tags, we found that Lam2 and Lam4 remain at ER-PM CSs when Laf1 and Dgr2 are absent, whereas neither Laf1 nor Dgr2 remain at ER-PM CSs when Lam2 and Lam4 are absent. Loss of Laf1 (but not Dgr2) impedes retrograde ergosterol transport, and a laf1∆ mutation does not exacerbate the transport defect of lam2∆ lam4∆ cells, indicating a shared function. Lam2 and Lam4 bind Laf1 and Dgr2 in vitro in a pull-down assay, and the PH domain in Lam2 hinders its interaction with Laf1. Lam2 phosphorylated by Ypk1, and Lam2 with phosphomimetic (Glu) replacements at its Ypk1 sites, exhibited a marked reduction in Laf1 binding. Thus, phosphorylation prevents Lam2 interaction with Laf1 at ER-PM CSs, providing a mechanism by which Ypk1 action inhibits retrograde sterol transport.