AP180 plays an important role in clathrin-mediated endocytosis of synaptic vesicles (SVs) and has also been implicated in retrieving SV proteins. In Drosophila, deletion of its homologue, Like-AP180 (LAP), has been shown to increase the size of SVs but decrease the number of SVs and transmitter release. However, it remains elusive whether a reduction in the total vesicle pool directly affects transmitter release. Further, it is unknown whether the lap mutation also affects vesicle protein retrieval and synaptic protein localization and, if so, how it might affect exocytosis. Using a combination of electrophysiology, optical imaging, electron microscopy, and immunocytochemistry, we have further characterized the lap mutant and hereby show that LAP plays additional roles in maintaining both normal synaptic transmission and protein distribution at synapses. While increasing the rate of spontaneous vesicle fusion, the lap mutation dramatically reduces impulse-evoked transmitter release at steps downstream of calcium entry and vesicle docking. Notably, lap mutations disrupt calcium coupling to exocytosis and reduce calcium cooperativity. These results suggest a primary defect in calcium sensors on the vesicles or on the release machinery. Consistent with this hypothesis, three vesicle proteins critical for calcium-mediated exocytosis, synaptotagmin I, cysteine-string protein, and neuronal synaptobrevin, are all mislocalized to the extrasynaptic axonal regions along with Dap160, an active zone marker (nc82), and glutamate receptors in the mutant. These results suggest that AP180 is required for either recycling vesicle proteins and/or maintaining the distribution of both vesicle and synaptic proteins in the nerve terminal.