Sec3p is a component of the exocyst complex that tethers secretory vesicles to the plasma membrane at exocytic sites in preparation for fusion. Unlike all other exocyst structural genes, SEC3 is not essential for growth. Cells lacking Sec3p grow and secrete surprisingly well at 25 degrees C; however, late markers of secretion, such as the vesicle marker Sec4p and the exocyst subunit Sec8p, localize more diffusely within the bud. Furthermore, sec3Delta cells are strikingly round relative to wild-type cells and are unable to form pointed mating projections in response to alpha factor. These phenotypes support the proposed role of Sec3p as a spatial landmark for secretion. We also find that cells lacking Sec3p exhibit a dramatic defect in the inheritance of cortical ER into the bud, whereas the inheritance of mitochondria and Golgi is unaffected. Overexpression of Sec3p results in a prominent patch of the endoplasmic reticulum (ER) marker Sec61p-GFP at the bud tip. Cortical ER inheritance in yeast has been suggested to involve the capture of ER tubules at the bud tip. Sec3p may act in this process as a spatial landmark for cortical ER inheritance.