By genetic analysis of Caenorhabditis elegans mutants defective in yolk uptake, we have identified new molecules functioning in the endocytosis pathway. Here we describe a novel J-domain-containing protein, RME-8, identified by such genetic analysis. RME-8 is required for receptor-mediated endocytosis and fluid-phase endocytosis in various cell types and is essential for C. elegans development and viability. In the macrophage-like coelomocytes, RME-8 localizes to the limiting membrane of large endosomes. Endocytosis markers taken up by the coelomocytes rapidly accumulate in these large RME-8-positive endosomes, concentrate in internal subendosomal structures, and later appear in RME-8-negative lysosomes. rme-8 mutant coelomocytes fail to accumulate visible quantities of endocytosis markers. These observations show that RME-8 functions in endosomal trafficking before the lysosome. RME-8 homologues are found in multicellular organisms from plants to humans but not in the yeast Saccharomyces cerevisiae. These sequence homologies suggest that RME-8 fulfills a conserved function in multicellular organisms.