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In the yeast, Saccharomyces cerevisiae , two ubiquitin-like modifications, Apg12 conjugation with Apg5 and Apg8 lipidation with phosphatidylethanolamine, are essential for autophagy and the cytoplasm-to-vacuole transport of aminopeptidase I (Cvt pathway). As a unique E1-like enzyme, Apg7 activates two modifiers (Apg12 and Apg8) in an ATP-dependent manner and, for this activity, the carboxyl terminal 40 amino acids are essential. For a better understanding of the function of the carboxyl terminus of Apg7, we performed a sequential deletion of the region. A mutant expressing Apg7ΔC17 protein, which lacks the carboxyl 17 amino acids of Apg7, showed defects in both the Cvt pathway and autophagy. Apg8 lipidation is inhibited in the mutant, while Apg12 conjugation occurs normally. A mutant expressing Apg7ΔC13 protein showed a defect in the Cvt pathway, but not autophagy, suggesting that the activity of Apg7 for Apg8 lipidation is more essential for the Cvt pathway than for autophagy. Mutant Apg7ΔC17 protein is still able to interact with Apg8, Apg12 and Apg3, and forms a homodimer, indicating that the deletion of the carboxyl terminal 17 amino acids has little effect on these interactions and Apg7 dimerization. These results suggest that the carboxyl terminal 17 amino acids of Apg7 play a specific role in Apg8 lipidation indispensable for the Cvt pathway and autophagy.