The mechanism by which yeast dipeptidyl aminopeptidase (DPAP) A, type II integral membrane protein, is retained in the late Golgi apparatus has been investigated. Prior work demonstrated that the 118-amino acid cytoplasmic domain is both necessary and sufficient for Golgi retention and that mutant or overexpressed DPAP A no longer retained in the Golgi was delivered directly to the vacuolar membrane (Roberts, C. J., S. F. Nothwehr, and T. H. Stevens. 1992. J. Cell Biol. 119:69-83). Replacement of the DPAP A transmembrane domain with a synthetic hydrophobic sequence did not affect either Golgi retention of DPAP A or vacuolar delivery of the retention-defective form of DPAP A. These results indicate that the DPAP A transmembrane domain is not involved in either Golgi retention or targeting of this membrane protein. A detailed mutational analysis of the cytoplasmic domain of DPAP A indicated that the most important elements for retention were within the eight residue stretch 85-92. A 10-amino acid region from DPAP A (81-90) was sufficient for Golgi retention of alkaline phosphatase, a type II vacuolar membrane protein. Detailed mutational analysis within this 10-amino acid sufficient region demonstrated that a Phe-X-Phe-X-Asp motif was absolutely required for efficient retention. The efficiency of Golgi retention via the DPAP A signal could be diminished by overexpression of wild type but not retention-defective versions of Kex2p, another late Golgi membrane protein, suggesting that multiple Golgi membrane proteins may be retained by a common machinery. These results imply a role for a cytoplasmic signal involving aromatic residues in retention of late Golgi membrane proteins in the yeast Saccharomyces cerevisiae.