We have purified biosynthetically labeled alpha-factor secreted from transformed yeast alpha cells. This alpha-factor binds specifically to a cells and is internalized by a time-, temperature-, and energy-dependent process. alpha-factor is internalized in an intact form and then rapidly degraded. Two yeast mutants defective in the accumulation of an endocytotic marker, lucifer yellow CH, in the vacuole have been isolated. end1 accumulates invaginations of the plasma membrane, and end2, an internal membrane-bound organelle. One of these mutants, end1, is defective for internalization of alpha-factor. Both of these mutants are defective in pheromone response.