ADP-ribosylation factor (ARF) is an abundant and highly conserved low molecular weight GTP-binding protein that was originally identified as a key element required for the action of cholera toxin in mammalian cells, but whose physiological role is unknown. We report that ARF family proteins are highly concentrated in non-clathrin-coated transport vesicles and are coat proteins. About three copies of ARF are present on the outside of coated vesicles per alpha-COP (and thus per coatomer). ARF is highly enriched in coated vesicles as compared with parental Golgi cisternae, as shown both by biochemical and morphological methods, and ARF is removed from transport vesicles through uncoating during transport. Furthermore, ARF binds to Golgi cisternae in a GTP-dependent manner independently of coated vesicle budding. These observations strongly suggest a new role for GTP-binding proteins: ARF proteins may modulate vesicle budding and uncoating through controlled GTP hydrolysis.