Adaptor protein complexes (AP) are major components of the cytoplasmic coat found on clathrin-coated vesicles. Here, we report the molecular and functional characterization of Dictyostelium clathrin-associated AP-1 complex, which in mammalian cells, participates mainly in budding of clathrin-coated vesicles from the trans-Golgi network (TGN). The gamma-adaptin AP-1 subunit was cloned and shown to belong to a Golgi-localized 300-kDa protein complex. Time-lapse analysis of cells expressing gamma-adaptin tagged with the green-fluorescent protein demonstrates the dynamics of AP-1-coated structures leaving the Golgi apparatus and rarely moving toward the TGN. Targeted disruption of the AP-1 medium chain results in viable cells displaying a severe growth defect and a delayed developmental cycle compared with parental cells. Lysosomal enzymes are constitutively secreted as precursors, suggesting that protein transport between the TGN and lysosomes is defective. Although endocytic protein markers are correctly localized to endosomal compartments, morphological and ultrastructural studies reveal the absence of large endosomal vacuoles and an increased number of small vacuoles. In addition, the function of the contractile vacuole complex (CV), an osmoregulatory organelle is impaired and some CV components are not correctly targeted.