Intracellular mRNA localization is a conserved mechanism for spatially regulating protein production in polarized cells, such as neurons. The mRNA encoding the translational repressor Nanos (Nos) forms ribonucleoprotein (RNP) particles that are dendritically localized in Drosophila larval class IV dendritic arborization (da) neurons. In nos mutants, class IV da neurons exhibit reduced dendritic branching complexity, which is rescued by transgenic expression of wild-type nos mRNA but not by a localization-compromised nos derivative. While localization is essential for nos function in dendrite morphogenesis, the mechanism underlying the transport of nos RNP particles was unknown. We investigated the mechanism of dendritic nos mRNA localization by analyzing requirements for nos RNP particle motility in class IV da neuron dendrites through live imaging of fluorescently labeled nos mRNA. We show that dynein motor machinery components mediate transport of nos mRNA in proximal dendrites. Two factors, the RNA-binding protein Rumpelstiltskin and the germ plasm protein Oskar, which are required for diffusion/entrapment-mediated localization of nos during oogenesis, also function in da neurons for formation and transport of nos RNP particles. Additionally, we show that nos regulates neuronal function, most likely independent of its dendritic localization and function in morphogenesis. Our results reveal adaptability of localization factors for regulation of a target transcript in different cellular contexts.