Kinesin motor proteins transport intracellular cargoes throughout cells by hydrolyzing ATP and moving along microtubule tracks. Intramolecular autoinhibitory interactions have been shown for several kinesins in vitro; however, the physiological significance of autoinhibition remains poorly understood. Here, we identified four mutations in the stalk region and motor domain of the synaptic vesicle (SV) kinesin UNC-104/KIF1A that specifically disrupt autoinhibition. These mutations augment both microtubule and cargo vesicle binding in vitro. In vivo, these mutations cause excessive activation of UNC-104, leading to decreased synaptic density, smaller synapses, and ectopic localization of SVs in the dendrite. We also show that the SV-bound small GTPase ARL-8 activates UNC-104 by unlocking the autoinhibition. These results demonstrate that the autoinhibitory mechanism is used to regulate the distribution of transport cargoes and is important for synaptogenesis in vivo.