VMA3, a structure gene of the vacuolar membrane H(+)-ATPase subunit c of Saccharomyces cerevisiae, has been cloned and characterized. The VMA3 gene encodes a hydrophobic polypeptide with 160 amino acids as reported previously by Nelson and Nelson (Nelson, H., and Nelson, N. (1989) FEBS Lett. 247, 147-153). Peptide sequence analysis indicated that the VMA3 gene product lacks N-terminal methionine and does not have a cleavable signal sequence. To investigate functional and structural roles of the subunit c for vacuolar acidification and protein transport to the vacuole, haploid mutants with the disrupted VMA3 gene were constructed. The vma3 mutants can grow in nutrient-enriched medium, but they have completely lost the vacuolar membrane H(+)-ATPase activity and the ability of vacuolar acidification in vivo. The subunit c was found to be indispensable for the assembly of subunits a and b of the H(+)-ATPase complex. The disruption of the VMA3 gene causes yeast cells with considerable lesions in vacuolar biogenesis and protein transport to the vacuole and inhibits endocytosis of lucifer yellow CH completely.