Small GTPases of the rab family are crucial elements of the machinery that controls membrane traffic. In the present study, we examined the distribution and function of rab11. Rab11 was shown by confocal immunofluorescence microscopy and EM to colocalize with internalized transferrin in the pericentriolar recycling compartment of CHO and BHK cells. Expression of rab11 mutants that are preferentially in the GTP- or GDP-bound state caused opposite effects on the distribution of transferrin-containing elements; rab11-GTP expression caused accumulation of labeled elements in the perinuclear area of the cell, whereas rab11-GDP caused a dispersion of the transferrin labeling. Functional studies showed that the early steps of uptake and recycling for transferrin were not affected by overexpression of rab11 proteins. However, recycling from the later recycling endosome was inhibited in cells overexpressing the rab11-GDP mutant. Rab5, which regulates early endocytic trafficking, acted before rab11 in the transferrin-recycling pathway as expression of rab5-GTP prevented transport to the rab11-positive recycling endosome. These results suggest a novel role for rab11 in controlling traffic through the recycling endosome.