Deficiency of the LIS1 protein causes lissencephaly, a brain developmental disorder. Although LIS1 binds the microtubule motor cytoplasmic dynein and has been linked to dynein function in many experimental systems, its mechanism of action remains unclear. Here, we revealed its function in cargo-adapter–mediated dynein activation in the model organism Aspergillus nidulans. Specifically, we found that overexpressed cargo adapter HookA (Hook in A. nidulans) missing its cargo-binding domain (ΔC-HookA) causes dynein and its regulator dynactin to relocate from the microtubule plus ends to the minus ends, and this relocation requires LIS1 and its binding protein, NudE. Astonishingly, the requirement for LIS1 or NudE can be bypassed to a significant extent by mutations that prohibit dynein from forming an autoinhibited conformation in which the motor domains of the dynein dimer are held close together. Our results suggest a novel mechanism of LIS1 action that promotes the switch of dynein from the autoinhibited state to an open state to facilitate dynein activation.