Secondary metabolism and development are linked in Aspergillus through the conserved regulatory velvet complex composed of VeA, VelB, and LaeA. The founding member of the velvet complex, VeA, shuttles between the cytoplasm and nucleus in response to alterations in light. Here we describe a new interaction partner of VeA identified through a reverse genetics screen looking for LaeA-like methyltransferases in Aspergillus nidulans. One of the putative LaeA-like methyltransferases identified, LlmF, is a negative regulator of sterigmatocystin production and sexual development. LlmF interacts directly with VeA and the repressive function of LlmF is mediated by influencing the localization of VeA, as over-expression of llmF decreases the nuclear to cytoplasmic ratio of VeA while deletion of llmF results in an increased nuclear accumulation of VeA. We show that the methyltransferase domain of LlmF is required for function; however, LlmF does not directly methylate VeA in vitro. This study identifies a new interaction partner for VeA and highlights the importance of cellular compartmentalization of VeA for regulation of development and secondary metabolism.