ORP7 is a member of oxysterol-binding protein (OSBP) family, the function of which has remained obscure. In this study, we identified by yeast two-hybrid screening an interaction partner of ORP7, GATE-16, which (i) regulates Golgi SNARE of 28kDa (GS28) function and stability, and (ii) plays a role in autophagosome biogenesis. The interaction was confirmed by bimolecular fluorescence complementation (BiFC) assay in living cells. The interacting regions were delineated within aa 1-142 of ORP7 and aa 30-117 of GATE-16. ORP7 knock-down in 293A cells resulted in a 40% increase of GS28 protein while ORP7 overexpression had the opposite effect (25% decrease of GS28). We show evidence that the regulation of GS28 by ORP7 does not occur at the level of transcription, but involves degradation of GS28 on proteasomes. Truncated ORP7 that lacks the GATE-16 binding region failed to affect GS28 stability, evidencing for specificity of the observed effect. Similar to ORP7 overexpression, treatment of cells with 25-hydroxycholesterol (25-OH) resulted in GS28 destabilization, which was potentiated by excess ORP7 and inhibited by ORP7 silencing. Overexpression of ORP7 led in most cells to formation of vacuolar structures positive for RFP-LC3, thus representing autophagic elements. Also GATE-16 was found in the vacuolar ORP7-positive elements, suggesting that excess ORP7 increases entrapment of GATE-16 in autophagosomes. Taken together, our results suggest that ORP7 negatively regulates GS28 protein stability via sequestration of GATE-16, and may mediate the effect of 25-OH on GS28 and Golgi function.