Sorting of membrane proteins between compartments of the secretory pathway is mediated in part by their transmembrane domains (TMDs). In animal cells, TMD length is a major factor in Golgi retention. In yeast, the role of TMD signals is less clear; it has been proposed that membrane proteins travel by default to the vacuole, and are prevented from doing so by cytoplasmic signals. We have investigated the targeting of the yeast endoplasmic reticulum (ER) t-SNARE Ufe1p. We show that the amino acid sequence of the Ufe1p TMD is important for both function and ER targeting, and that the requirements for each are distinct. Targeting is independent of Rer1p, the only candidate sorting receptor for TMD sequences currently known. Lengthening the Ufe1p TMD allows transport along the secretory pathway to the vacuole or plasma membrane. The choice between these destinations is determined by the length and composition of the TMD, but not by its precise sequence. A longer TMD is required to reach the plasma membrane in yeast than in animal cells, and shorter TMDs direct proteins to the vacuole. TMD-based sorting is therefore a general feature of the yeast secretory pathway, but occurs by different mechanisms at different points.