ADP-ribosylation factors (ARFs) are ubiquitous regulators of virtually every step of vesicular membrane traffic. Yeast Arf3p, which is most similar to mammalian ARF6, is not essential for cell viability and not required for endoplasmic reticulum-to-Golgi protein transport. Although mammalian ARF6 has been implicated in the regulation of early endocytic transport, we found that Arf3p was not required for fluid-phase, membrane internalization, or mating-type receptor-mediated endocytosis. Arf3p was partially localized to the cell periphery, but was not detected on endocytic structures. The nucleotide-binding, N-terminal region, and N-terminal myristate of Arf3p are important for its proper localization. C-Terminally green fluorescent protein-tagged Arf3, expressed from the endogenous promoter, exhibited a polarized localization to the cell periphery and buds, in a cell cycle-dependent manner. Arf3-GFP achieved its proper localization during polarity growth through an actin-independent pathway. Both haploid and homologous diploid arf3 mutants exhibit a random budding defect, and the overexpression of the GTP-bound form Arf3p(Q71L) or GDP-binding defective Arf3p(T31N) mutant interfered with budding-site selection. We conclude that the GTPase cycle of Arf3p is likely to be important for the function of Arf3p in polarizing growth of the emerging bud and/or an unidentified vesicular trafficking pathway.