Vacuolar protein sorting (vps) mutants of Saccharomyces cerevisiae missort and secrete vacuolar hydrolases. The gene affected in one of these mutants, VPS21, encodes a member of the Sec4/Ypt/Rab family of small GTPases. Rab proteins play an essential role in vesicle-mediated protein transport. Using both yeast two-hybrid assays and chemical cross-linking, we have identified another VPS gene product, Vps9p, that preferentially interacts with a mutant form of Vps21p-S21N that binds GDP but not GTP. In vitro purified Vps9p was found to stimulate GDP release from Vps21p in a dose-dependent manner. Vps9p also stimulated GTP association as a result of facilitated GDP release. However, Vps9p did not stimulate guanine nucleotide exchange of GTP-bound Vps21p or GTP hydrolysis. We tested the ability of Vps9p to stimulate the intrinsic guanine nucleotide exchange activity of Rab5, which is a mammalian sequence homologue of Vps21p, and Ypt7p, which is another yeast Rab protein involved in vacuolar protein transport. Rab5, but not Ypt7p was responsive to Vps9p, which indicates that Vps9p recognizes sequence variation among Rab proteins. We conclude that Vps9p is a novel guanine nucleotide exchange factor that is specific for Vps21p/Rab5. Since there are no obvious Vps9p sequence homologues in yeast, Vps9p may also possess unique regulatory functions required for vacuolar protein transport.