A yeast GTP-binding protein, the YPT1 gene product, has been found to function early in the secretion pathway. The ypt1-1 mutation causes a phenotype reminiscent of early secretion-defective mutants, including accumulation of membranes and vesicles as well as a partial defect in secretion and incomplete glycosylation of invertase. Immunofluorescence localization studies using affinity-purified antibody directed against the YPT1 protein showed punctate staining of the cytoplasm of growing yeast cells and very intense staining of small buds, where membrane growth and secretion are most active. The punctate cytoplasmic staining is changed in a mutant (sec7) under conditions that cause aberrant Golgi structures to accumulate. The pattern of immunofluorescence obtained when mouse cells were stained with the antibody coincided closely with the pattern observed with wheat germ agglutinin, suggesting that a mammalian counterpart of the yeast YPT1 protein is located in the Golgi apparatus. These results are interpreted as suggesting that GTP-binding proteins may act to direct intracellular vesicle traffic.