Vps4p is an AAA‐type ATPase required for efficient transport of biosynthetic and endocytic cargo from an endosome to the lysosome‐like vacuole of Saccharomyces cerevisiae. Vps4p mutants that do not bind ATP or are defective in ATP hydrolysis were characterized both in vivo and in vitro. The nucleotide‐free or ADP‐bound form of Vps4p existed as a dimer, whereas in the ATP‐locked state, Vps4p dimers assembled into a decameric complex. This suggests that ATP hydrolysis drives a cycle of association and dissociation of Vps4p dimers/decamers. Nucleotide binding also regulated the association of Vps4p with an endosomal compartment in vivo. This membrane association required the N‐terminal coiled‐coil motif of Vps4p, but deletion of the coiled‐coil domain did not affect ATPase activity or oligomeric assembly of the protein. Membrane association of two previously uncharacterized class E Vps proteins, Vps24p and Vps32p/Snf7p, was also affected by mutations in VPS4. Upon inactivation of a temperature‐conditional vps4 mutant, Vps24p and Vps32p/Snf7p rapidly accumulated in a large membrane‐bound complex. Immunofluorescence indicated that both proteins function with Vps4p at a common endosomal compartment. Together, the data suggest that the Vps4 ATPase catalyzes the release (uncoating) of an endosomal membrane‐associated class E protein complex (es) required for normal morphology and sorting activity of the endosome.