In the yeast Saccharomyces cerevisiae, the Apg12p-Apg5p conjugating system is essential for autophagy. Apg7p is required for the conjugation reaction, because Apg12p is unable to form a conjugate with Apg5p in the apg7/cvt2 mutant. Apg7p shows a significant similarity to a ubiquitin-activating enzyme, Uba1p. In this article, we investigated the function of Apg7p as an Apg12p-activating enzyme. Hemagglutinin-tagged Apg12p was coimmunoprecipitated with c-myc-tagged Apg7p. A two-hybrid experiment confirmed the interaction. The coimmunoprecipitation was sensitive to a thiol-reducing reagent. Furthermore, a thioester conjugate of Apg7p was detected in a lysate of cells overexpressing both Apg7p and Apg12p. These results indicated that Apg12p interacts with Apg7p via a thioester bond. Mutational analyses of Apg7p suggested that Cys507 of Apg7p is an active site cysteine and that both the ATP-binding domain and the cysteine residue are essential for the conjugation of Apg7p with Apg12p to form the Apg12p-Apg5p conjugate. Cells expressing mutant Apg7ps, Apg7pG333A, or Apg7pC507A showed defects in autophagy and cytoplasm-to-vacuole targeting of aminopeptidase I. These results indicated that Apg7p functions as a novel protein-activating enzyme necessary for Apg12p-Apg5p conjugation.