Resident late-Golgi membrane proteins in Saccharomyces cerevisiae are selectively retrieved from a prevacuolar-endosomal compartment, a process dependent on aromatic amino acid-based sorting determinants on their cytosolic domains. The formation of retrograde vesicles from the prevacuolar compartment and the selective recruitment of vesicular cargo are thought to be mediated by a peripheral membrane retromer protein complex. We previously described mutations in one of the retromer subunit proteins, Vps35p, which caused cargo-specific defects in retrieval. By genetic and biochemical means we now show that Vps35p directly associates with the cytosolic domains of cargo proteins. Chemical cross-linking, followed by coimmunoprecipitation, demonstrated that Vps35p interacts with the cytosolic domain of A-ALP, a model late-Golgi membrane protein, in a retrieval signal-dependent manner. Furthermore, mutations in the cytosolic domains of A-ALP and another cargo protein, Vps10p, were identified that suppressed cargo-specific mutations in Vps35p but did not suppress the retrieval defects of a vps35 null mutation. Suppression was shown to be due to an improvement in protein sorting at the prevacuolar compartment. These data strongly support a model in which Vps35p acts as a "receptor" protein for recognition of the retrieval signal domains of cargo proteins during their recruitment into retrograde vesicles.