Intracellular trafficking is a tightly regulated cellular process, mediated in part by Rab GTPases and their corresponding effector proteins. Viruses have evolved mechanisms to hijack these processes to promote their lifecycles. Here we describe a mechanism by which cleavage of the Rab7 adaptor protein, RILP (Rab interacting lysosomal protein) is induced by viral infection. We report that RILP is directly cleaved by caspase-1 and we have identified a novel caspase-1 recognition site at aspartic acid 75 within the RILP sequence. Alanine substitution at D75 blocks caspase-1-mediated RILP cleavage. Full-length RILP localizes in a tight vesicular structure near the perinuclear region while the cleaved form of RILP re-distributes throughout the cytoplasm. However, cleavage alone was insufficient to re-localize RILP to the cellular periphery and re-localization required specific phosphorylation events near the caspase-1 recognition site. The combination of cleavage and phosphorylation were both needed for release from the dynein component p150Glued and redistribution of CD63+ve intracellular vesicles.