Coatomer, the coat protein complex of COPI vesicles, is involved in the budding of these vesicles, but the underlying mechanism is unknown. Toward a better understanding of this process, the interaction between coatomer and the cytoplasmic domain of a major transmembrane protein of COPI vesicles, p23, was studied. Interaction of coatomer with this peptide domain results in a conformational change and polymerization of the complex in vitro. This changed conformation also is observed in vivo, i.e., on the surface of authentic, isolated COPI vesicles. An average of four peptides was found associated with one coatomer complex after polymerization. Based on these results, we propose a mechanism by which the induced conformational change of coatomer results in its polymerization, and thus drives formation of the bud on the Golgi membrane during biogenesis of a COPI vesicle.