Rab7 is a small GTPase localized to the late endosomal compartment. Its function was investigated by overexpressing dominant negative or constitutively active mutants in BHK-21 cells. The effects of such overexpression on the internalization and/or degradation of different endocytic markers and on the morphology of the late endosomal compartment were analyzed. We observed a marked inhibition of the degradation of 125I-low density lipoproteins in cells transfected with the Rab7 dominant negative mutants while the rate of internalization was not affected. Moreover in these cells there was an accumulation of many small vesicles scattered throughout the cytoplasm. In contrast, overexpression of the activating mutants led to the appearance of atypically large endocytic structures and caused a dramatic change in the distribution of the cation-independent mannose 6-phosphate receptor. Our data indicate that the Rab7 protein in mammalian cells is present on a late endosomal compartment much larger than the compartment labeled by the cation-independent mannose 6-phosphate receptor. Rab7 also appears to play a fundamental role in controlling late endocytic membrane traffic.