Mitotic phosphorylation of the conserved GRASP domain of GRASP65 disrupts its self-association, leading to a loss of Golgi membrane tethering, cisternal unlinking, and Golgi breakdown. Recently, the structural basis of the GRASP self-interaction was determined, yet the mechanism by which phosphorylation disrupts this activity is unknown. Here, we present the crystal structure of a GRASP phosphomimic containing an aspartic acid substitution for a serine residue (Ser-189) that in GRASP65 is phosphorylated by PLK1, causing a block in membrane tethering and Golgi ribbon formation. The structure revealed a conformational change in the GRASP internal ligand that prevented its insertion into the PDZ binding pocket, and gel filtration assays showed that this phosphomimic mutant exhibited a significant reduction in dimer formation. Interestingly, the structure also revealed an apparent propagation of conformational change from the site of phosphorylation to the shifted ligand, and alanine substitution of two residues (Glu-145 and Ser-146) at penultimate positions in this chain rescued dimer formation by the phosphomimic. These data reveal the structural basis of the phosphoinhibition of GRASP-mediated membrane tethering and provide a mechanism for its allosteric regulation.