Golgi stacks are often located near sites of "transitional ER" (tER), where COPII transport vesicles are produced. This juxtaposition may indicate that Golgi cisternae form at tER sites. To explore this idea, we examined two budding yeasts: Pichia pastoris, which has coherent Golgi stacks, and Saccharomyces cerevisiae, which has a dispersed Golgi. tER structures in the two yeasts were visualized using fusions between green fluorescent protein and COPII coat proteins. We also determined the localization of Sec12p, an ER membrane protein that initiates the COPII vesicle assembly pathway. In P. pastoris, Golgi stacks are adjacent to discrete tER sites that contain COPII coat proteins as well as Sec12p. This arrangement of the tER-Golgi system is independent of microtubules. In S. cerevisiae, COPII vesicles appear to be present throughout the cytoplasm and Sec12p is distributed throughout the ER, indicating that COPII vesicles bud from the entire ER network. We propose that P. pastoris has discrete tER sites and therefore generates coherent Golgi stacks, whereas S. cerevisiae has a delocalized tER and therefore generates a dispersed Golgi. These findings open the way for a molecular genetic analysis of tER sites.