Alkalinization of normally acidic intracellular compartments or acidification of a mildly alkaline cytoplasm by biochemical or genetic manipulation has been demonstrated to inhibit both endocytosis and secretion (Tartakoff, 1983a; Cosson et al., 1989; Mellman et al., 1986; Davoust et al., 1987; Cosson et al., 1989; van Deurs et al., 1989; Maxfield & Yamashiro, 1991; Hansen et al., 1993). These results provide the basis for the conclusion that the maintenance of pH gradients between acidic vesicular compartments and a mildly alkaline cytoplasm is an essential biochemical requirement for the correct functioning of the endocytotic and secretory machinery. Tumor cells have been shown to have an abnormally acidic cytoplasmic pH (Warburg, 1956; Simon & Schindler, 1994). Here we report that the intracellular vesicular compartments in tumor cells (MCF-7) derived from a human breast cancer fail to acidify. This failure results in a significant decrease in the pH gradient (0.9 pH unit) between the vesicular luminal compartments and the cytoplasm. These defects are correlated with a disruption in the organization and function of the trans-Golgi network (TGN) and the pericentriolar recycling compartment (PRC). In marked distinction, drug-resistant tumor cells (MCF-7adr) derived from the MCF-7 line that are resistant to the most widely employed chemotherapeutic drug, adriamycin, appear normal in both acidification and organization of the PRC and TGN. Treatment of drug-resistant MCF-7adr cells with nigericin and monensin, ionophores demonstrated to disrupt vesicular acidification (Tartakoff, 1983b), leads to a resensitization of these cells to adriamycin. Drug sensitivity is proposed to result from an acidification defect within vesicles of the recycling and secretory pathways. A functional consequence of this defect is the diminished capacity of cells to remove cytotoxic drugs from the cytoplasm by sequestration of protonated drugs within the vesicles, followed by drug secretion through the activity of the secretory and recycling pathways.