In the yeast Saccharomyces cerevisiae, the Apg12p–Apg5p conjugating system is essential for autophagy. Apg7p is required for the conjugation reaction, because Apg12p is unable to form a conjugate with Apg5p in the apg7/cvt2 mutant. Apg7p shows a significant similarity to a ubiquitin-activating enzyme, Uba1p. In this article, we investigated the function of Apg7p as an Apg12p-activating enzyme. Hemagglutinin-tagged Apg12p was coimmunoprecipitated with c-myc–tagged Apg7p. A two-hybrid experiment confirmed the interaction. The coimmunoprecipitation was sensitive to a thiol-reducing reagent. Furthermore, a thioester conjugate of Apg7p was detected in a lysate of cells overexpressing both Apg7p and Apg12p. These results indicated that Apg12p interacts with Apg7p via a thioester bond. Mutational analyses of Apg7p suggested that Cys507 of Apg7p is an active site cysteine and that both the ATP-binding domain and the cysteine residue are essential for the conjugation of Apg7p with Apg12p to form the Apg12p–Apg5p conjugate. Cells expressing mutant Apg7ps, Apg7pG333A, or Apg7pC507A showed defects in autophagy and cytoplasm-to-vacuole targeting of aminopeptidase I. These results indicated that Apg7p functions as a novel protein-activating enzyme necessary for Apg12p–Apg5p conjugation.