Heterotetrameric adaptor (AP) complexes are thought to coordinate cargo recruitment and clathrin assembly during clathrin-coated vesicle biogenesis. We have identified, and characterized the physiological significance of clathrin-binding activities in the two large subunits of the AP-1 complex in Saccharomyces cerevisiae. Using GST-fusion chromatography, two clathrin-binding sites were defined in the beta1 subunit that match consensus clathrin-binding sequences in other mammalian and yeast clathrin-binding proteins. Clathrin interactions were also identified with the C-terminal region of the gamma subunit. When introduced into chromosomal genes, point mutations in the beta1 clathrin-binding motifs, or deletion of the gamma C-terminal region, reduced association of AP-1 with clathrin in coimmunoprecipitation assays. The beta1 mutations or the gamma truncation individually produced minor effects on AP-1 distribution by subcellular fractionation. However, when beta1 and gamma mutations were combined, severe defects were observed in AP-1 association with membranes and incorporation into clathrin-coated vesicles. The combination of subunit mutations accentuated growth and alpha-factor pheromone maturation defects in chc1-ts cells, though not to the extent caused by complete loss of AP-1 activity. Our results suggest that both the beta1 and gamma subunits contribute interactions with clathrin that are important for stable assembly of AP-1 complexes into clathrin coats in vivo.