The Vps15 protein kinase and the Vps34 phosphatidylinositol 3-kinase (PI 3-kinase) are required for the sorting of soluble hydrolases to the yeast vacuole. Over-production of Vps34p suppresses the growth and vacuolar protein sorting defects associated with vps15 kinase domain mutants, suggesting that Vps15p and Vps34p functionally interact. Subcellular fractionation and sucrose density gradients indicate that Vps15p is responsible for the association of Vps34p with an intracellular membrane fraction. Chemical cross-linking and native immunoprecipitation experiments demonstrate that Vps15p and Vps34p interact as components of a hetero-oligomeric protein complex. In addition, we show that an intact Vps15 protein kinase domain is required for activation of the Vps34 PI 3-kinase, suggesting that the Vps34 lipid kinase is regulated by a Vps15p-mediated protein phosphorylation event. We propose that Vps15p and Vps34p function together as components of a membrane-associated signal transduction complex that regulates intracellular protein trafficking decisions through protein and lipid phosphorylation events.