Lysosome-associated membrane protein 5 (LAMP5) is a mammalian ortholog of the Caenorhabditis elegans protein, UNC-46, which functions as a sorting factor to localize the vesicular GABA transporter UNC-47 to synaptic vesicles. In the mouse forebrain, LAMP5 is expressed in a subpopulation of GABAergic neurons in the olfactory bulb and the striato-nigral system, where it is required for fine-tuning of GABAergic synaptic transmission. Here we focus on the prominent expression of LAMP5 in the brainstem and spinal cord and suggest a role for LAMP5 in these brain regions. LAMP5 was highly expressed in several brainstem nuclei involved with auditory processing including the cochlear nuclei, the superior olivary complex, nuclei of the lateral lemniscus and grey matter in the spinal cord. It was localized exclusively in inhibitory synaptic terminals, as has been reported in the forebrain. In the absence of LAMP5, localization of the vesicular inhibitory amino acid transporter (VIAAT) was unaltered in the lateral superior olive and the ventral cochlear nuclei, arguing against a conserved role for LAMP5 in trafficking VIAAT. Lamp5 knockout mice showed no overt behavioral abnormality but an increased startle response to auditory and tactile stimuli. In addition, LAMP5 deficiency led to a larger intensity-dependent increase of wave I, II and V peak amplitude of auditory brainstem response. Our results indicate that LAMP5 plays a pivotal role in sensorimotor processing in the brainstem and spinal cord.