In yeast and mammals, the AAA ATPase Vps4p/SKD1 (for Vacuolar protein sorting 4/SUPPRESSOR OF K(+) TRANSPORT GROWTH DEFECT1) is required for the endosomal sorting of secretory and endocytic cargo. We identified a VPS4/SKD1 homolog in Arabidopsis thaliana, which localizes to the cytoplasm and to multivesicular endosomes. In addition, green fluorescent protein-SKD1 colocalizes on multivesicular bodies with fluorescent fusion protein endosomal Rab GTPases, such as ARA6/RabF1, RHA1/RabF2a, and ARA7/RabF2b, and with the endocytic marker FM4-64. The expression of SKD1(E232Q), an ATPase-deficient version of SKD1, induces alterations in the endosomal system of tobacco (Nicotiana tabacum) Bright Yellow 2 cells and ultimately leads to cell death. The inducible expression of SKD1(E232Q) in Arabidopsis resulted in enlarged endosomes with a reduced number of internal vesicles. In a yeast two-hybrid screen using Arabidopsis SKD1 as bait, we isolated a putative homolog of mammalian LYST-INTERACTING PROTEIN5 (LIP5)/SKD1 BINDING PROTEIN1 and yeast Vta1p (for Vps twenty associated 1 protein). Arabidopsis LIP5 acts as a positive regulator of SKD1 by increasing fourfold to fivefold its in vitro ATPase activity. We isolated a knockout homozygous Arabidopsis mutant line with a T-DNA insertion in LIP5. lip5 plants are viable and show no phenotypic alterations under normal growth conditions, suggesting that basal SKD1 ATPase activity is sufficient for plant development and growth.