ADP ribosylation factor (ARF) is thought to play a critical role in recruiting coatomer (COPI) to Golgi membranes to drive transport vesicle budding. Yeast strains harboring mutant COPI proteins exhibit defects in retrograde Golgi to endoplasmic reticulum protein transport and striking cargo-selective defects in anterograde endoplasmic reticulum to Golgi protein transport. To determine whether arf mutants exhibit similar phenotypes, the anterograde transport kinetics of multiple cargo proteins were examined in arf mutant cells, and, surprisingly, both COPI-dependent and COPI-independent cargo proteins exhibited comparable defects. Retrograde dilysine-mediated transport also appeared to be inefficient in the arf mutants, and coatomer mutants with no detectable anterograde transport defect exhibited a synthetic growth defect when combined with arf1Delta, supporting a role for ARF in retrograde transport. Remarkably, we found that early and medial Golgi glycosyltransferases localized to abnormally large ring-shaped structures. The endocytic marker FM4-64 also stained similar, but generally larger ring-shaped structures en route from the plasma membrane to the vacuole in arf mutants. Brefeldin A similarly perturbed endosome morphology and also inhibited transport of FM4-64 from endosomal structures to the vacuole. Electron microscopy of arf mutant cells revealed the presence of what appear to be hollow spheres of interconnected membrane tubules which likely correspond to the fluorescent ring structures. Together, these observations indicate that organelle morphology is significantly more affected than transport in the arf mutants, suggesting a fundamental role for ARF in regulating membrane dynamics. Possible mechanisms for producing this dramatic morphological change in intracellular organelles and its relation to the function of ARF in coat assembly are discussed.