Rab7b is a recently identified member of the Rab GTPase protein family and has high similarity to Rab7. It has been reported that Rab7b is lysosome associated, that it is involved in monocytic differentiation and that it promotes lysosomal degradation of TLR4 and TLR9. Here we investigated further the localization and function of this GTPase. We found that wild-type Rab7b is lysosome associated whereas an activated, GTP-bound form of Rab7b localizes to the Golgi apparatus. In contrast to Rab7, Rab7b is not involved in EGF and EGFR degradation. Depletion of Rab7b or expression of Rab7b T22N, a Rab7b dominant-negative mutant, impairs cathepsin-D maturation and causes increased secretion of hexosaminidase. Moreover, expression of Rab7b T22N or depletion of Rab7b alters TGN46 distribution, cation-independent mannose-6-phosphate receptor (CI-MPR) trafficking, and causes an increase in the levels of the late endosomal markers CI-MPR and cathepsin D. Vesicular stomatitis virus G protein (VSV-G) trafficking, by contrast, is normal in Rab7b-depleted or Rab7b-T22N-expressing cells. In addition, depletion of Rab7b prevents cholera toxin B-subunit from reaching the Golgi. Altogether, these data indicate that Rab7b is required for normal lysosome function, and, in particular, that it is an essential factor for retrograde transport from endosomes to the trans-Golgi network (TGN).