We have identified a Drosophila gene (arflike, arl) encoding a protein that is structurally related (approximately 55% identity) to the ADP-ribosylation factors (ARFs) of yeast and mammals. Biochemical analyses of purified recombinant arl-encoded protein revealed properties similar to the ARF proteins, including the ability to bind and hydrolyze GTP. Clear functional differences between arl and ARF proteins, including a complete lack of ARF activity, suggest that arl is not a functional homolog of ARF. A recessive lethal arl mutation was recovered, demonstrating that the arl locus is an essential gene. We conclude that the arl locus encodes an essential member of the ARF subfamily of small GTP-binding proteins in Drosophila.