VPS10 (Vacuolar Protein Sorting) encodes a large type I transmembrane protein (Vps10p), involved in the sorting of the soluble vacuolar hydrolase carboxypeptidase Y (CPY) to the Saccharomyces cerevisiae lysosome-like vacuole. Cells lacking Vps10p missorted greater than 90% CPY and 50% of another vacuolar hydrolase, PrA, to the cell surface. In vitro equilibrium binding studies established that the 1,380-amino acid lumenal domain of Vps10p binds CPY precursor in a 1:1 stoichiometry, further supporting the assignment of Vps10p as the CPY sorting receptor. Vps10p has been immunolocalized to the late-Golgi compartment where CPY is sorted away from the secretory pathway. Vps10p is synthesized at a rate 20-fold lower that that of its ligand CPY, which in light of the 1:1 binding stoichiometry, requires that Vps10p must recycle and perform multiple rounds of CPY sorting. The 164-amino acid Vps10p cytosolic domain is involved in receptor trafficking, as deletion of this domain resulted in delivery of the mutant Vps10p to the vacuole, the default destination for membrane proteins in yeast. A tyrosine-based signal (YSSL80) within the cytosolic domain enables Vps10p to cycle between the late-Golgi and prevacuolar/endosomal compartments. This tyrosine-based signal is homologous to the recycling signal of the mammalian mannose-6-phosphate receptor. A second yeast gene, VTH2, encodes a protein highly homologous to Vps10p which, when over-produced, is capable of suppressing the CPY and PrA missorting defects of a vps10 delta strain. These results indicate that a family of related receptors act to target soluble hydrolases to the vacuole.