The VPS15 gene encodes a novel protein kinase homolog that is essential for the efficient delivery of soluble hydrolases to the yeast vacuole. Point mutations altering highly conserved residues within the Vps15p kinase domain result in the secretion of multiple vacuolar proteases. In addition, the in vivo phosphorylation of Vps15p is defective in these kinase domain mutants, suggesting that Vps15p may regulate specific protein phosphorylation reactions required for protein sorting to the yeast vacuole. Subcellular fractionation studies further demonstrate that the 1455 amino acid Vps15p is peripherally associated with the cytoplasmic face of a late Golgi or vesicle compartment. This association may be mediated by myristate as Vps15p contains a consensus signal for N-terminal myristoylation. We propose that protein phosphorylation may act as a molecular "switch" within intracellular protein sorting pathways by actively diverting proteins from a default transit pathway (e.g., secretion) to an alternative pathway (e.g., to the vacuole).