The ypt/rab proteins are a family of small GTP-binding proteins thought to be required for different stages of membrane traffic. From the fission yeast Schizosaccharomyces pombe we have isolated and characterized ypt5, a gene encoding a homologue of rab5, a mammalian protein apparently involved in regulating fusion of early endosomes. Recombinant ypt5 protein bound GTP. The ypt5 gene was found to be essential for viability on minimal media, but ypt5-disrupted cells grew slowly on some rich media and accumulated a population of small vesicles not observed in wild-type cells. Canine rab5 cDNA could replace the ypt5 gene in S. pombe and restore normal growth and viability. Ypt5 protein expressed in mammalian cells colocalized with the transferrin receptor to early endosomes. Thus, molecular aspects of the early endocytic pathway may be conserved between mammalian cells and S. pombe and hence may be amenable to genetic analysis.