The C2 domain of the Rsp5 ubiquitin ligase binds membrane phosphoinositides and directs ubiquitination of endosomal cargo

Ubiquitin ligases of the Nedd4 family regulate membrane protein trafficking by modifying both cargo proteins and the transport machinery with ubiquitin. Here, we investigate the role of the yeast Nedd4 homologue, Rsp5, in protein sorting into vesicles that bud into the multivesicular endosome (MVE) en route to the vacuole. A mutant lacking the Rsp5 C2 domain is unable to ubiquitinate or sort biosynthetic cargo into MVE vesicles, whereas endocytic cargo is ubiquitinated and sorted efficiently. The C2 domain binds specifically to phosphoinositides in vitro and is sufficient for localization to membranes in intact cells. Mutation of a lysine-rich patch on the surface of the C2 domain abolishes membrane interaction and disrupts sorting of biosynthetic cargo. Translational fusion of ubiquitin to a biosynthetic cargo protein alleviates the requirement for the C2 domain in its MVE sorting. These results demonstrate that the C2 domain specifies Rsp5-dependent ubiquitination of endosomal cargo and suggest that Rsp5 function is regulated by membrane phosphoinositides.