Saccharomyces cerevisiae vacuole inheritance requires two low molecular weight activities, LMA1 and LMA2. LMA1 is a heterodimer of thioredoxin and protease B inhibitor 2 (I2B). Here we show that the second low molecular weight activity (LMA2) is monomeric I2B. Though LMA2/I2B was initially identified as a protease B inhibitor, this protease inhibitor activity is not related to its ability to promote vacuole fusion: (i) Low Mr protease B inhibitors cannot substitute for LMA1 or LMA 2, (ii) LMA1 and LMA2 promote the fusion of vacuoles from a strain that has no protease B, (iii) low concentrations of LMA2 that fully inhibit protease B do not promote vacuole fusion, and (iv) LMA1, in which I2B is complexed with thioredoxin, is far more active than LMA2/I2B in promoting vacuole fusion and far less active in inhibiting protease B. These studies establish a new function for I2B.