Two Saccharomyces cerevisiae mutants, end3 and end4, defective in the internalization step of endocytosis, have previously been isolated. The END3 gene was cloned by complementation of the temperature-sensitive growth defect caused by the end3 mutation and the END3 nucleotide sequence was determined. The END3 gene product is a 40-kDa protein that has a putative EF-hand Ca(2+)-binding site, a consensus sequence for the binding of phosphotidylinositol 4,5-bisphosphate (PIP2), and a C-terminal domain containing two homologous regions of 17-19 aa. The EF-hand consensus and the putative PIP2-binding sites are seemingly not required for End3 protein function. In contrast, different portions of the End3p N-terminal domain, and at least one of the two repeated regions in its C-terminus, are required for End3p activity. Disruption of the END3 gene yielded cells with the same phenotype as the original end3 mutant. An end3ts allele was obtained and this allowed us to demonstrate that End3p is specifically involved in the internalization step of endocytosis. In addition, End3p was shown to be required for proper organization of the actin cytoskeleton and for the correct distribution of chitin at the cell surface.