Upon addition of GTP gamma S to in vitro budding reactions, COP I vesicles form but retain their coat, making them easy to isolate and analyze, We have developed an in vitro budding assay that reconstitutes the formation of COP I-derived vesicles under conditions where GTP hydrolysis can occur. Once formed, vesicles are uncoated and appear functional as they fuse readily with acceptor membranes. Electron microscopy shows a homogeneous population of uncoated vesicles that contain the medial/trans Golgi enzyme alpha 1,2-mannosidase II. Biochemical quantitation of vesicles reveals that resident Golgi enzymes are up to 10-fold more concentrated than in donor membranes, but vesicles formed in the presence of GTP gamma S show an average density of resident Golgi enzymes similar to that seen in donor membranes. We show that the sorting process is mediated by the small GTPase arf-l as addition of a dominant, hydrolysis-deficient arf-l (Q)71(L) mutant produced results similar to that of GTP gamma S, Strikingly, the average density of the anterograde cargo protein, polymeric IgA receptor, in COP I-derived vesicles was similar to that found in starting membranes and was independent of GTP hydrolysis. We conclude that hydrolysis of GTP bound to arf-l promotes selective segregation and concentration of Golgi resident enzymes into COP I vesicles.