The Chediak-Higashi syndrome (CHS) is a genetic disorder caused by the loss of the BEACH protein Lyst. Impaired lysosomal function in CHS patients results in many physiological problems, including immunodeficiency, albinism and neurological problems. Dictyostelium LvsB is the ortholog of mammalian Lyst and is also important for lysosomal function. A knock-in approach was used to tag LvsB with green fluorescent protein (GFP) and express it from its single chromosomal locus. GFP-LvsB was observed on late lysosomes and postlysosomes. Loss of LvsB resulted in enlarged postlysosomes, in the abnormal localization of proton pumps on postlysosomes and their abnormal acidification. The abnormal postlysosomes in LvsB-null cells were produced by the inappropriate fusion of early endosomal compartments with postlysosomal compartments. The intermixing of compartments resulted in a delayed transit of fluid-phase marker through the endolysosomal system. These results support the model that LvsB and Lyst proteins act as negative regulators of fusion by limiting the heterotypic fusion of early endosomes with postlysosomal compartments.