Retromer is a highly conserved protein complex composed of three core proteins VPS35, VPS26 and VPS29. It plays a central and essential role in endosomal membrane trafficking, acting as a hub for endosomal tubulovesicular membrane trafficking in coordination with members of the sorting nexin (SNX) protein family and regulatory proteins1. Mutation of retromer has been found to cause Parkinson’s disease2, likely due to disruption of endosomal morphology and trafficking, and its down-regulation is linked to neurodegenerative phenotypes in Alzheimer’s disease3. Recently, retromer has been shown to be important for endosome-to-plasma membrane recycling, retrieving cargo from lysosomal degradation through its association with the adaptor protein SNX27. This interaction couples retromer to a wide array of cargo, bound to the SNX27 PDZ domain via type-I PDZ binding motifs (PDZbms). Cargos include critical receptors, channels and transporters such as the Kir3.3 potassium channel, and glucose transporter 1 (GLUT1) among many others5. Our crystal structure of the PDZ domain of SNX27 bound to the retromer protein VPS26A reveals a unique mechanism of PDZ-domain-mediated interaction. The structure explains how SNX27 can bind VPS26A as it simultaneously recruits transmembrane cargo molecules via their C-terminal PDZ binding motifs, while also allowing VPS26A to be incorporated into the retromer complex by association with VPS35. Structure-based mutagenesis to perturb the SNX27-VPS26 association shows that this is essential for the recycling of cargo receptors from endosomes to the plasma membrane. Mechanistically, the binding of retromer to the PDZ domain of SNX27 increases the binding affinity for cargo PDZ binding motifs by over an order of magnitude, suggesting an important role for retromer-SNX27 cooperativity in endosomal cargo selectivity. These results demonstrate a novel mechanism of protein binding by a PDZ supramodule and provide molecular insight into the biologically critical endocytic recycling of cargo proteins via the SNX27-retromer-mediated pathway.