Using confocal microscopy, we observed ring-like organelles, similar in size to nuclei, in the hyphal tip of the filamentous fungus Neurospora crassa. These organelles contained a subset of vacuolar proteins. We hypothesize that they are novel prevacuolar compartments (PVCs). We examined the locations of several vacuolar enzymes and of fluorescent compounds that target the vacuole. Vacuolar membrane proteins, such as the vacuolar ATPase (VMA-1) and the polyphosphate polymerase (VTC-4), were observed in the PVCs. A pigment produced by adenine auxotrophs, used to visualize vacuoles, also accumulated in PVCs. Soluble enzymes of the vacuolar lumen, alkaline phosphatase and carboxypeptidase Y, were not observed in PVCs. The fluorescent molecule Oregon Green 488 carboxylic acid diacetate, succinimidyl ester (carboxy-DFFDA) accumulated in vacuoles and in a subset of PVCs, suggesting maturation of PVCs from the tip to distal regions. Three of the nine Rab GTPases in N. crassa, RAB-2, RAB-4, and RAB-7, localized to the PVCs. RAB-2 and RAB-4, which have similar amino acid sequences, are present in filamentous fungi but not in yeasts, and no function has previously been reported for these Rab GTPases in fungi. PVCs are highly pleomorphic, producing tubular projections that subsequently become detached. Dynein and dynactin formed globular clusters enclosed inside the lumen of PVCs. The size, structure, dynamic behavior, and protein composition of the PVCs appear to be significantly different from those of the well-studied prevacuolar compartment of yeasts.T he vacuolar compartments in cells of fungi and plants have many of the same functions as the lysosomal compartments of animal cells (1-5). The defining characteristics of vacuoles and lysosomes are (i) the presence of a variety of hydrolytic enzymes such as proteases and phosphatases that help to degrade and recycle macromolecules and (ii) the maintenance of an acidic internal pH. An electrochemical gradient for protons is generated across vacuolar/lysosomal membranes by the vacuolar ATPase, a large complex enzyme (1, 6).We have been investigating the structure and function of the vacuolar compartments in filamentous fungi, using Neurospora crassa as our model organism. In fungi, vacuoles have multiple functions in addition to the degradation of macromolecules. They are involved in the regulation of arginine and ornithine metabolism, osmoregulation, and cytosolic ion and pH homeostasis. Fungal vacuoles contain high concentrations of basic amino acids, calcium, and polyphosphate (1, 4, 5).The vacuolar compartment in filamentous fungi has a complex structure and is highly dynamic (3,7,8). Many vacuoles have internal contents with a different refractive index than that of the cytosol, allowing them to be visualized with Nomarski optics. These vacuoles, prominent in older parts of the hypha, are spherical, ranging in size from Ͻ0.5 m to Ͼ10 m. Other vacuoles, prominent in the first hyphal segment, take the form of a dense network of interconnected tubules (9, 10). For N. cra...