Atg21 and Atg18 are homologue yeast proteins. Whereas Atg18 is essential for the Cvt pathway and autophagy, a lack of Atg21 only blocks the Cvt pathway. Our proteinase protection experiments now demonstrate that growing atg21Delta cells fail to form proaminopeptidase I-containing Cvt vesicles. Quantitative measurement of autophagy in starving atg21Delta cells showed only 35% of the wild-type rate. This suggests that Atg21 plays a nonessential role in improving the fidelity of autophagy. The intracellular localization of Atg21 is unique among the Atg proteins. In cells containing multiple vacuoles, Atg21-yellow fluorescent protein clearly localizes to the vertices of the vacuole junctions. Cells with a single vacuole show most of the protein at few perivacuolar punctae. This distribution pattern is reminiscent to the Vps class C(HOPS) (homotypic fusion and vacuolar protein sorting) protein complex. In growing cells, Atg21 is required for effective recruitment of Atg8 to the preautophagosomal structure. Consistently, the covalent linkage of Atg8 to the lipid phosphatidylethanolamine is significantly retarded. Lipidated Atg8 is supposed to act during the elongation of autophagosome precursors. However, despite the reduced autophagic rate and the retardation of Atg8 lipidation, electron microscopy of starved atg21Delta ypt7Delta double mutant cells demonstrates the formation of normally sized autophagosomes with an average diameter of 450 nm.