Vp10p is a receptor that sorts several different vacuolar proteins by cycling between a late Golgi compartment and the endosome. The cytoplasmic tail of Vps10p is necessary for the recycling, whereas the lumenal domain is predicted to interact with the soluble ligands. We have studied ligand binding to Vps10p by introducing deletions in the lumenal region. This region contains two domains with homology to each other. Domain 2 binds carboxypeptidase Y (CPY), proteinase A (PrA) and hybrids of these proteases with invertase. Moreover, we show that aminopeptidase Y (APY) is a ligand of Vps10p. The native proteases compete for binding to domain 2. Binding of CPY(156)-invertase or PrA(137)-invertase, on the other hand, do not interfere with binding of CPY to Vps10p. Furthermore, the Q24RPL27 sequence known to be important for vacuolar sorting of CPY, is of little importance in the Vps10p-dependent sorting of CPY-invertase. Apparently, domain 2 contains two different binding sites; one for APY, CPY and PrA, and one for CPY-invertase and PrA-invertase. The latter interaction seems not to be sequence specific, and we suggest that an unfolded structure in these ligands is recognized by Vps10p.