Soluble proteins in the endoplasmic reticulum (ER) contain a specific carboxy terminal sequence KDEL (Lys-Asp-Glu-Leu), and include the coat proteins required for vesicle budding from the ER, proteins that form retrograde vesicles on post-ER compartments, and integral membrane proteins that target vesicles to their correct destination. The retention of these soluble proteins in the ER depends on the interaction of the KDEL sequence with the corresponding KDEL receptor, also designated ERD2, in the Golgi apparatus. When KDEL proteins reach the Golgi complex, they are recognized by the KDEL receptor and transported retrograde in COPI-coated vesicles back to the ER. The small GTPase ADP-ribosylation factor 1 (ARF1), a regulator of vesicle transport, interacts with the KDEL receptor. Subsequently, this interaction allows the KDEL receptor to recruit a GTPase-activating protein (GAP) from the cytosol to membranes, which inactivates ARF1.