We have mapped a sequence determinant in the vacuolar glycoprotein carboxypeptidase Y (CPY) that directs intracellular sorting of this enzyme. Through the study of hybrid proteins, consisting of amino-terminal segments of CPY fused to the secretory enzyme invertase, we have found that the N-terminal 50 amino acids of CPY are sufficient to direct delivery of a CPY-Inv hybrid protein to the yeast vacuole. Our data suggest that this 50 amino acid segment of CPY contains two distinct functional domains; an N-terminal signal peptide followed by a segment of 30 amino acids that contains the vacuolar sorting signal. Deletion of this putative vacuole sorting signal from an otherwise wild-type CPY protein leads to missorting of CPY. Furthermore, examination of the Asn-linked oligosaccharides present on CPY and CPY-Inv hybrid proteins suggests that an additional determinant in CPY specifies the extent to which these proteins are glycosylated in the Golgi complex.