The function of Ric-3, which is required for nicotinic acetylcholine receptor (nAChR) expression in C. elegans, is unclear. Here we found that Ric-3 can promote or inhibit cell-surface delivery of alpha-bungarotoxin-binding nAChRs (BgtRs) composed of alpha7 subunits. At low levels, Ric-3 promoted BgtR assembly, endoplasmic reticulum (ER) release, and cell-surface delivery without trafficking from the ER. At high Ric-3 levels, Ric-3 suppressed BgtR surface delivery, but not its assembly, and BgtRs were retained in the ER or in Ric-3-containing aggregates. In PC12 cells, native BgtRs trafficked to the cell surface from the ER where low levels of endogenous Ric-3 were observed. In cultured neurons, native Ric-3 levels were higher than in PC12 cells, and Ric-3 and alpha7 subunits were found in somata and dendrites, but not axons, of inhibitory interneurons. Ric-3 trafficked with alpha7 subunits in rapidly moving vesicles to dendrites, where it was restricted to the ER subcompartment. We conclude that Ric-3 has two potential functions. At low levels, Ric-3 interactions are short-lived and promote BgtR assembly and ER release. At higher levels, Ric-3 interactions are longer-lived and mediate ER retention. In neurons, Ric-3 ER retention appears to promote transport within the dendritic ER subcompartment, thereby restricting alpha7 trafficking to dendrites and preventing axonal transport.