Autophagy is a vacuolar trafficking pathway that targets subcellular constituents to the vacuole for degradation and recycling. In nutrient-rich conditions in yeast, a different vacuolar trafficking pathway, the cytoplasm to vacuole targeting (Cvt) pathway, transports the resident hydrolase aminopeptidase I to the vacuole, using many of the same molecular components as autophagy. The Cvt pathway is constitutive, whereas autophagy is induced by starvation. Recent studies have laid important groundwork for understanding the signaling mechanism that induces autophagy. Another key advance has been the identification of two novel conjugation systems that function in vesicle formation in both pathways. Finally, many autophagy- and Cvt-specific gene products, including those involved in lipid modification, vesicle expansion and cargo specificity, have been shown to localize to a novel perivacuolar membrane compartment. Additional analysis of this location will help in further dissecting the early events of vesicle formation and identifying the source of the sequestering membrane.