The intracellular association of symbiotic dinoflagellates (zooxanthellae) with marine cnidarians is the very foundation of the highly productive and diversified coral reef ecosystems. To reveal its underlying molecular mechanisms, we previously cloned ApRab7, a Rab7 homologue of the sea anemone Aiptasia pulchella, and demonstrated its selective exclusion from phagosomes containing live zooxanthellae, but not from those containing either dead or photosynthesis-impaired algae. In this study, Rab5 was characterized, due to its key role in endocytosis and phagocytosis acting upstream of Rab7. The Aiptasia Rab5 homologue (ApRab5) is 79.5% identical to human Rab5C and contains all Rab-specific signature motifs. Subcellular fractionation study showed that ApRab5 is mainly cytosolic. EGFP reporter and phagocytosis studies indicated that membrane-associated ApRab5 is present in early endocytic and phagocytic compartments, and is able to promote their fusion. Significantly, immunofluorescence study showed that the majority of phagosomes containing either resident or newly internalized live zooxanthellae were labeled with ApRab5, while those containing either heat-killed or photosynthesis-impaired algae were mostly negative for ApRab5 staining whereas the opposite was observed for ApRab7. We propose that active phagosomal retention of ApRab5 is part of the mechanisms employed by live zooxanthellae to: (1) persist inside their host cells and (2) exclude ApRab7 from their phagosomes, thereby, establishing and/or maintaining an endosymbiotic relationship with their cmdarian hosts. (C) 2004 Elsevier Inc. All rights reserved.