In S. cerevisiae synthesis of phosphatidylinositol (3,5)-bisphosphate [PtdIns(3,5)P2] by Fab1p is required for several cellular events, including an as yet undefined step in the ubiquitin-dependent trafficking of some integral membrane proteins from the trans-Golgi network to the vacuole lumen. AP-1 is a heterotetrameric clathrin adaptor protein complex that binds cargo proteins and clathrin coats, and regulates bi-directional protein trafficking between the trans-Golgi network and the endocytic/secretory pathway. Like fab1Delta cells, AP-1 complex component mutants have lost the ability to traffic ubiquitylated cargoes to the vacuole lumen - the first demonstration that AP-1 is required for this process. Deletion mutants of AP-1 complex components are compromised in their ability to synthesize PtdIns(3,5)P2, indicating that AP-1 is required for correct in vivo activation of Fab1p. Furthermore, wild-type protein sorting can be restored in AP-1 mutants by overexpression of Fab1p, implying that the protein-sorting defect in these cells is as a result of disruption of PtdIns(3,5)P2 synthesis. Finally, we show that Fab1p and Vac14p, an activator of Fab1p, are also required for another AP-1-dependent process: chitin-ring deposition in chs6Delta cells. Our data imply that AP-1 is required for some Fab1p and PtdIns(3,5)P2-dependent processes.