A segment polarity gene required for wingless (wg)-dependent patterning processes, acting in both wg-sending cells and wg-target cells. In non-neuronal cells wls directs wg secretion. The wls traffic loop encompasses the Golgi, the cell surface, an endocytic compartment and a retrograde route leading back to the Golgi, and involves clathrin-mediated endocytosis and the retromer complex (a conserved protein complex consisting of Vps35 and Vps26). In neuronal cells (the larval motorneuron NMJ), the wg signal moves across the synapse via the release of wls-containing exosome-like vesicles. Postsynaptic wls is required for the trafficking of fz2 through the fz2-interacting protein Grip (By similarity). Interacts with wg; in the Golgi. Interacts with Vps35, a component of the retromer complex; wls stability is regulated by Vps35 (By similarity). In non-neuronal cells, wls binds to wg in the Golgi and accompanies it to the plasma membrane where the two proteins dissociate. Wg is secreted and wls is then internalized and returns to the Golgi apparatus in a retromer-dependent manner. Wls and wg colocalize in the Golgi apparatus in wg-producing cells, and reduced expression is seen in non-producing cells. Endoplasmic reticulum expression is unchanged in wg-producing versus non-producing cells. In neuronal cells, wls is localized both pre- and postsynaptically and is transferred trans-synaptically from the pre- to the postsynaptic compartment (By similarity). Belongs to the wntless family.