Abstract: Autophagy is a process for the bulk degradation of proteins, in which cytoplasmic components of the cell are enclosed by double-membrane structures known as autophagosomes for delivery to lysosomes or vacuoles for degradation. This process is crucial for survival during starvation and cell differentiation. No molecules have been identified that are involved in autophagy in higher eukaryotes. We have isolated 14 autophagy-defective (apg) mutants of the yeast Saccharomyces cerevisiae and examined the autophagic process at the molecular level. We show here that a unique covalent-modification system is essential for autophagy to occur. The carboxy-terminal glycine residue of Apg12, a 186-amino-acid protein, is conjugated to a lysine at residue 149 of Apg5, a 294-amino-acid protein. Of the apg mutants, we found that apg7 and apg10 were unable to form an Apg5/Apg12 conjugate. By cloning APG7, we discovered that Apg7 is a ubiquitin-E1-like enzyme. This conjugation can be reconstituted in vitro and depends on ATP. To our knowledge, this is the first report of a protein unrelated to ubiquitin that uses a ubiquitination-like conjugation system. Furthermore, Apg5 and Apg12 have mammalian homologues, suggesting that this new modification system is conserved from yeast to mammalian cells.