The yeast genome encodes seven oxysterol binding protein homologs, Osh1p-Osh7p, which have been implicated in regulating intracellular lipid and vesicular transport. Here, we show that both Osh6p and Osh7p interact with Vps4p, a member of the AAA (ATPases associated with a variety of cellular activities) family. The coiled-coil domain of Osh7p was found to interact with Vps4p in a yeast two-hybrid screen and the interaction between Osh7p and Vps4p appears to be regulated by ergosterol. Deletion of VPS4 induced a dramatic increase in the membrane-associated pools of Osh6p and Osh7p and also caused a decrease in sterol esterification, which was suppressed by overexpression of OSH7. Lastly, overexpression of the coiled-coil domain of Osh7p (Osh7pCC) resulted in a multivesicular body sorting defect, suggesting a dominant negative role of Osh7pCC possibly through inhibiting Vps4p function. Our data suggest that a common mechanism may exist for AAA proteins to regulate the membrane association of yeast OSBP proteins and that these two protein families may function together to control subcellular lipid transport.