Membrane contact sites (MCSs) between the endoplasmic reticulum (ER) and late endosomes/lysosomes (LE/lys) are emerging as critical hubs for diverse cellular events, and changes in their extents are linked to severe neurological diseases. While recent studies show that the synaptotagmin-like mitochondrial-lipid-binding (SMP) domain-containing protein PDZD8 may mediate the formation of ER-LE/lys MCSs, the cellular functions of PDZD8 remain largely elusive. Here, we attempt to investigate the lipid transfer activities of PDZD8 and the extent to which its cellular functions depend on its lipid transfer activities. In accordance with recent studies, we demonstrate that PDZD8 is a protrudin (ZFYVE27)-interacting protein and that PDZD8 acts as a tether at ER-LE/lys MCSs. Furthermore, we discover that the SMP domain of PDZD8 binds glycerophospholipids and ceramides both in vivo and in vitro, and that the SMP domain can transport lipids between membranes in vitro. Functionally, PDZD8 is required for LE/lys positioning and neurite outgrowth, which is dependent on the lipid transfer activity of the SMP domain. This article has an associated First Person interview with the first author of the paper.