Mutations in the yeast gene VPS41 give rise to poor growth on low iron medium, severe alterations in vacuolar morphology, and cause the missorting of membranous and soluble vacuolar proteins. Our studies predict that VPS41 encodes a hydrophilic protein of 992 amino acids that contains no obvious signal sequence or hydrophobic domains. The deduced Vps41p sequence contains a domain rich in glutamic and aspartic residues, as well as a domain with resemblance to a region of clathrin heavy chain. We have also identified and sequenced putative VPS41 homologues from Caenorhabditis elegans , plants, and humans. The VPS41 homologues (but not the yeast VPS41 itself) contain a conserved cysteine-rich RING-H2 zinc finger at their COOH termini. Biochemical experiments suggest that VPS41 functions in post-Golgi protein processing: the deletion mutant exhibits defective high affinity transport due to impaired Fet3p activity and also exhibits defects in the processing and sorting of multiple vacuolar hydrolases.