Dap160/Intersectin is a multidomain adaptor protein that colocalizes with endocytic machinery in the periactive zone at the Drosophila NMJ. We have generated severe loss-of-function mutations that eliminate Dap160 protein from the NMJ. dap160 mutant synapses have decreased levels of essential endocytic proteins, including dynamin, endophilin, synaptojanin, and AP180, while other markers of the active zone and periactive zone are generally unaltered. Functional analyses demonstrate that dap160 mutant synapses are unable to sustain high-frequency transmitter release, show impaired FM4-64 loading, and show a dramatic increase in presynaptic quantal size consistent with defects in synaptic vesicle recycling. The dap160 mutant synapse is grossly malformed with abundant, highly ramified, small synaptic boutons. We present a model in which Dap160 scaffolds both endocytic machinery and essential synaptic signaling systems to the periactive zone to coordinately control structural and functional synapse development.