The ras-like GTP binding protein rab4 is the only known rab protein on endosomes that is phosphorylated during mitosis. Since a large fraction of rab4 accumulates in the cytosol in mitotic cells, we investigated the molecular mechanism controlling membrane association of rab4. We first show that human rab4 is phosphorylated by recombinant mammalian p34cdc2 kinase in vitro. Next, the actual site of phosphorylation and its functional significance were determined using stably transfected CHO cell lines producing high levels of wild type rab4 or rab4 mutants bearing alterations at Ser196, which occurs within a consensus site for p34cdc2 kinase phosphorylation (S196PRR). Mutation of Ser196 to glutamine or aspartic acid completely prevented rab4 phosphorylation in mitotic cells and also blocked its appearance in the cytosol. Neither C-terminal isoprenylation nor carboxymethylation of rab4 was affected by the mutations or by phosphorylation. Finally, dephosphorylation and reassociation of soluble rab4 with membranes occurred upon exit of cells from mitosis. Thus, phosphorylation of Ser196 is directly responsible for the reversible translocation of rab4 into the cytosol of mitotic cells.