ADP ribosylation factor (Arf) GTPase-activating proteins (GAPs) promote the hydrolysis of GTP bound to Arfs to GDP, which plays a pivotal role in regulating Arfs by converting the active GTP-bound forms of these proteins into their inactive GDP-bound forms. Here, we investigated the biological role of AGD7, an Arf GAP homolog, in Arabidopsis (Arabidopsis thaliana). We show that AGD7 bears a highly conserved N-terminal region and a unique C-terminal region, interacts with Arf1 both in vitro and in vivo, and stimulates Arf1 GTPase activity in a phosphatidic acid-dependent manner in vitro. In plant cells, AGD7 localized to the Golgi complex, where its overexpression was found to inhibit the Golgi localization of gamma-subunit of coat proteins and promote the relocation of Golgi proteins into the endoplasmic reticulum in both protoplasts and transgenic plants. Furthermore, overexpression of AGD7 inhibited anterograde trafficking of proteins from the endoplasmic reticulum. We propose that AGD7 functions as a GAP for Arf1 in the Golgi complex and plays a critical role in protein trafficking by controlling Arf1 activity.