Sorting of signal-transducing cell surface receptors within multivesicular
bodies (MVBs) is required for their rapid down-regulation and degradation w
ithin lysosomes. Yeast mutants defective in late stages of transport to the
vacuole/lysosome accumulate MVBs. We demonstrate that the membrane glycopr
otein carboxypeptidase S and the G protein-coupled receptor Ste2p are targe
ted into the vacuole lumen, and this process requires a subset of VPS gene
products essential for normal endosome function. The PtdIns(3)P B-kinase ac
tivity of Fab1p, which converts the product of the Vps34p PtdIns 3-kinase P
tdIns(3)P into PtdIns(3,5)P-2, also is required for cargo-selective sorting
into the vacuole lumen. These findings demonstrate a role for phosphoinosi
tide signaling at distinct stages of vacuolar/lysosomal protein transport a
nd couple PtdIns(3,5)P-2 synthesis to regulation of MVB sorting.