The ESCRT-I, -II, and -III protein complexes function to create multivesicular bodies (MVBs) for sorting of proteins destined for the lysosome or vacuole. Prior studies with Saccharomyces cerevisiae have shown that the ESCRT-III protein Snf7p interacts with the MVB pathway protein Bro1p as well as its homolog Rim20p. Rim20p has no role in MVB formation, but functions in the Rim101p pH-response pathway; Rim20p interacts with transcription factor Rim101p and is required for the activation of Rim101p by C-terminal proteolytic cleavage. We report here that ESCRT-III proteins Snf7p and Vps20p as well as all ESCRT-I and -II proteins are required for Rim101p proteolytic activation in S. cerevisiae. Mutational analysis indicates that the Rim20p N-terminal region interacts with Snf7p, and an insertion in the Rim20p "Bro1 domain" abolishes this interaction, as determined with two-hybrid assays. Disruption of the MVB pathway through mutations affecting non-ESCRT proteins does not impair Rim101p processing. The relationship between the MVB pathway and Rim101p pathway is conserved in Candida albicans, because mutations in four ESCRT subunit genes abolish alkaline pH-induced filamentation, a phenotype previously seen for rim101 and rim20 mutants. The defect is suppressed by expression of C-terminally truncated Rim101-405p, as expected for mutations that block Rim101p proteolytic activation. These results indicate that the ESCRT complexes govern a specific signal transduction pathway and suggest that the MVB pathway may provide a signal that regulates pH-responsive transcription.