Autophagy is a conserved process for the bulk degradation of cytoplasmic material. Triggering of autophagy results in the formation of double membrane-bound vesicles termed autophagosomes. The conserved Atg5-Atg12/Atg16 complex is essential for autophagosome formation. Here, we show that the yeast Atg5-Atg12/Atg16 complex directly binds membranes. Membrane binding is mediated by Atg5, inhibited by Atg12 and activated by Atg16. In a fully reconstituted system using giant unilamellar vesicles and recombinant proteins, we reveal that all components of the complex are required for efficient promotion of Atg8 conjugation to phosphatidylethanolamine and are able to assign precise functions to all of its components during this process. In addition, we report that in vitro the Atg5-Atg12/Atg16 complex is able to tether membranes independently of Atg8. Furthermore, we show that membrane binding by Atg5 is downstream of its recruitment to the pre-autophagosomal structure but is essential for autophagy and cytoplasm-to-vacuole transport at a stage preceding Atg8 conjugation and vesicle closure. Our findings provide important insights into the mechanism of action of the Atg5-Atg12/Atg16 complex during autophagosome formation.