Autophagy is a degradative process in which cytoplasmic components are non-selectively sequestered by double-membrane structures, termed autophagosomes, and transported to the vacuole. We have identified and characterized a novel protein Apg2p essential for autophagy in yeast. Biochemical and fluorescence microscopic analyses indicate that Apg2p functions at the step of autophagosome formation. Apg2p localizes to some membranous structure distinct from any known organelle. Using fluorescent protein-tagged Apg2p, we showed that Apg2p localizes to a dot structure close to the vacuole, where Apg8p also exists, but not on autophagosomes unlike Apg8p. This punctate localization of Apg2p depends on the function of Apg1p kinase, phosphatidylinositol 3-kinase complex and Apg9p. Apg2pG83E, encoded by an apg2-2 allele, shows a severely reduced activity of autophagy and a dispersed localization in the cytoplasm. Overexpression of the mutant Apg2p lessens the defect in autophagy. These results suggest that the dot structure is physiologically important. Apg2p and Apg8p are independently recruited to the structure but coordinately function there to form the autophagosome.