Bulk degradation of cytosol and organelles is important for cellular homeostasis under nutrient limitation, cell differentiation and development. This process occurs in a lytic compartment, and autophagy is the major route to the lysosome and/or vacuole. We found that yeast, Saccharomyces cerevisiae, induces autophagy under various starvation conditions. The whole process is essentially the same as macroautophagy in higher eukaryotic cells. However, little is known about the mechanism of autophagy at a molecular level. To elucidate the molecules involved, a genetic approach was carried out and a total of 16 autophagy–defective mutants (apg) were isolated. So far, 14 APG genes have been cloned. Among them we recently found a unique protein conjugation system essential for autophagy. The C–terminal glycine residue of a novel modifier protein Apg12p, a 186–amino–acid protein, is conjugated to a lysine residue of Apg5p, a 294–amino–acid protein, via an isopeptide bond. We also found that apg7 and apg10 mutants were unable to form an Apg12p–Apg5p conjugate. The conjugation reaction is mediated via Apg7p, E1–like activating enzyme and Apg10p, indicating that it is a ubiquitination–like system. These APG genes have mammalian homologues, suggesting that the Apg12 system is conserved from yeast to human. Further molecular and cell biological analyses of APG gene products will give us crucial clues to uncover the mechanism and regulation of autophagy.