The late Golgi compartment is a major protein sorting station in the cell. Secreted proteins, cell surface proteins, and proteins destined for endosomes or lysosomes must be sorted from one another at this compartment and targeted to their correct destinations. The molecular details of protein trafficking pathways from the late Golgi to the endosomal system are becoming increasingly well understood due in part to information obtained by genetic analysis of yeast. It is now clear that proteins identified in yeast have functional homologues (orthologues) in higher organisms. We will review the molecular mechanisms of protein targeting from the late Golgi to endosomes and to the vacuole (the equivalent of the mammalian lysosome) of the budding yeast Saccharomyces cerevisiae.