The secretory pathway of eukaryotic cells consists of a number of distinct membrane-bound compartments interconnected by vesicular traffic. Each compartment has a characteristic content of proteins and lipids, which must be maintained. This is achieved in most cases by active sorting-proteins may reach the wrong compartment but are continually retrieved. A good example is the retrieval system for lumenal ER proteins. These proteins carry a specific sorting signal, typically the tetrapeptide KDEL, which is bound by a receptor in the Golgi apparatus. The receptor-ligand complex, together with escaped ER membrane proteins, returns to the ER. Many of the components of vesicle traffic, including the coat proteins required for vesicle budding from the ER, those that form retrograde vesicles on post-ER compartments, and integral membrane proteins that target the vesicles to their correct destination, have been identified. The sorting events that occur can largely be understood in terms of specific protein-protein interactions involving these components. However, sorting of some membrane proteins, including the vesicle targeting molecules, is influenced by their transmembrane domains, and it is likely that segregation of these is dependent on the composition and biophysical properties of the lipid bilayer, which very between compartments. The secretory pathway is thus a dynamic entity, split into discrete organelles by the constant segregation and recycling of lipids and proteins, processes that are ultimately driven by the mechanics of vesicle formation and fusion.