Rab GTPases belong to the Ras GTPase superfamily and are key regulators of membrane traffic. Among them, rab7 has been localized on late endosomes of NRK cells but its function remains unknown. In order to investigate its role, we generated stable HeLa cell lines that express either wild type or a GTPase-defective mutant of rab7 in an inducible manner. A morphological analysis of the intracellular localization of these proteins was performed by confocal laser microscopy. Here we show that, in HeLa cells, rab7 is present on a vesicular compartment that extends from the perinuclear area to the cell periphery and shows only a partial colocalization with the cation-independent mannose 6-phosphate receptor, a marker for late endosomes. The topology of this compartment is dependent on the microtubule network since nocodazole treatment results in its scattering throughout the cytoplasm. In addition, we observed that, in contrast to the wild-type protein, a rab7 mutant with a reduced GTPase activity is in part associated with lysosomal membranes. This observation was confirmed by subcellular fractionation in a Percoll gradient. Our data implicate rab7 as the first GTPase functioning on terminal endocytic structures in mammalian cells.