ATF6 is an endoplasmic reticulum (ER) stress-regulated transmembrane transcription factor that activates the transcription of ER molecular chaperones. Upon ER stress, ATF6 translocates from the ER to the Golgi where it is processed to its active form. We have found that the ER chaperone BiP/GRP78 binds ATF6 and dissociates in response to ER stress. Loss of BiP binding correlates with the translocation of ATF6 to the Golgi, which was slowed in cells overexpressing BiP. Two Golgi localization signals (GLSs) were identified in ATF6. Removal of BiP binding sites from ATF6, while retaining a GLS, resulted in its constitutive translocation to the Golgi. These results suggest that BiP retains ATF6 in the ER by inhibiting its GLSs and that dissociation of BiP during ER stress allows ATF6 to be transported to the Golgi.