Yeast Atg8 and its mammalian homolog LC3 are ubiquitin-like proteins involved in autophagy, a primary pathway for degradation of cytosolic constituents in vacuoles/lysosomes. Whereas the lipid phosphatidylethanolamine (PE) was identified as the sole in vivo target of their conjugation reactions, in vitro studies showed that the same system can mediate the conjugation of these proteins with phosphatidylserine as efficiently as with PE. Here, we show that, in contrast to PE conjugation, the in vitro phosphatidylserine conjugation of Atg8 is markedly suppressed at physiological pH. Furthermore, the addition of acidic phospholipids to liposomes also results in the preferential formation of the Atg8-PE conjugate. We have successfully captured authentic thioester intermediates, allowing us to elucidate which step in the conjugation reaction is affected by these changes in pH and membrane lipid composition. We propose that these factors contribute to the selective formation of Atg8-PE in the cell.