Arrate Mallabiabarrena and Vivek Malhotra Biology Department University of California, San Diego La Jolla, California 92093-0347 Membranes of the exocytic and endocytic transport path- ways are endowed with the ability to generate 50-150 nm diameter vesicles that carry cargo between different cellu- lar compartments. Vesicle formation requires the associa- tion of cytosolic coat proteins with the membrane, and the first discernible morphological change in the membrane is the appearance of small coated buds. These buds even- tually pinch off, allowing the newly formed vesicles to be targeted to their final destinations. Vesicles involved in endocytosis and those that mediate transport from the trans-Golgi network (TGN) to endosomes have clathrin coats. The structure and biochemistry of clathrin coats have been illuminated by many years of investigation (Pearse and Robinson, 1990). In 1986, Orci and Rothman identified a second type of coat on vesicles that bud from the rims of Golgi cisternae. Unlike clathrin coats, this new coat did not have a clearly visible lattice-like structure- it looked “fuzzy” in electron micrographs (Orci et al., 1986). The components of this novel coat were later identified as an oligomeric complex that was designated coatomer, and the subunits were termed COPS (for coatomer pro- teins). A similar fuzzy coat, but with a totally different pro- tein composition, was recently shown by Schekman and colleagues to be present on endoplasmic reticulum (ER)- derived vesicles (Barlowe et al., 1994). To avoid confusion, the Golgi-associated COP complex is now called COPI and the ER-associated coat complex is called COPII. The biochemical characterization of COPS has yielded major insights into the molecular mechanisms of vesicular trans- port (Rothman, 1994). However, many fundamental ques- tions remain. For example, focusing only on the vesicle formation stage of the transport process, we can ask the following questions. Does the assembly of cytoplasmic coats provide the driving force for membrane deformation during vesicle budding? To what extent do these coats help select cargo during the budding process? Is there a specific signal that triggers vesicle production? If so, what step of vesicle formation is subject to regulation? What prevenis the membranes of secretory organelles from ve- siculating completely? As anyone who follows the protein transport field can attest, the list of questions goes on and on. Several recent papers provide important clues about the biochemistry and cell biology of vesicle formation. Mellman and colleagues document in this issue of Ce// that COP-l forms vesicles not only from Golgi membranes, but also from endosomes (Whitney et al., 1995). Interest- ingly, of the seven COPI subunits a, 6, 6: y, 6, E, and 6, y and 6 do not bind to endosomes, demonstrating that COPI subunits can be present in different functional com- plexes (Whitney et al., 1995). In other recent papers, Roth-