The class C subset of vacuolar protein sorting (Vps) proteins (Vps11, Vps18, Vps16 and Vps33) assembles into a vacuole/prevacuole-associated complex. Here we demonstrate that the class C-Vps complex contains two additional proteins, Vps39 and Vps41. The COOH-terminal 148 amino acids of Vps39 direct its association with the class C-Vps complex by binding to Vps11. A previous study has shown that a large protein complex containing Vps39 and Vps41 functions as a downstream effector of the active, GTP-bound form of Ypt7, a rab GTPase required for the fusion of vesicular intermediates with the vacuole (Price, A., D. Seals, W. Wickner, and C. Ungermann. 2000. J. Cell Biol. 148:1231–1238). Here we present data that indicate that this complex also functions to stimulate nucleotide exchange on Ypt7. We show that Vps39 directly binds the GDP-bound and nucleotide-free forms of Ypt7 and that purified Vps39 stimulates nucleotide exchange on Ypt7. We propose that the class C-Vps complex both promotes Vps39-dependent nucleotide exchange on Ypt7 and, based on the work of Price et al., acts as a Ypt7 effector that tethers transport vesicles to the vacuole. Thus, the class C-Vps complex directs multiple reactions during the docking and fusion of vesicles with the vacuole, each of which contributes to the overall specificity and efficiency of this transport process.