In Saccharomyces cerevisiae several members of the ATP-binding cassette transporter superfamily efflux a broad range of xenobiotic substrates from cells. The vacuole also plays a critical role in multidrug resistance. Mutations in genes such as VPS3 that are essential for vacuolar acidification and carboxypeptidase Y vacuolar protein-sorting are multidrug sensitive. A similar phenotype is also observed with deletions of VPS15, VPS34, and VPS38, which encode essential members of the carboxypeptidase Y vacuolar protein-sorting pathway. Prior to the work described herein, detoxification by transporters and the vacuole were presumed to function independently. We demonstrate that this is not the case. Significantly, Vps3 has an epistatic relationship with Pdr5, a major yeast multidrug transporter. Thus, a double pdr5, vps3 deletion mutant is no more multidrug sensitive than its isogenic single-mutant counterparts. Subcellular fractionation experiments and analysis of purified plasma membrane vesicles indicate, however, that a vps3 mutation does not affect the membrane-localization or ATPase activity of Pdr5 even though rhodamine 6G efflux is reduced significantly. This suggests that Vps3 and probably other members of the carboxypeptidase Y vacuolar protein-sorting pathway are required for relaying xenobiotic compounds to transporters in the membrane.