Recent results have provided increasing evidence for the existence of an intermediate membrane compartment between the rough endoplasmic reticulum and the Golgi complex which seems to function in protein sorting and the regulation of membrane traffic in the early part of the exocytic pathway. Localization of resident marker proteins has shown that this compartment consists of both peripheral and central elements. The aim of the present review is to combine the data on the pre-Golgi compartment with previous ideas of membrane traffic at the ER-Golgi interface. We propose a model which describes how mobile, endosome-like elements of the pre-Golgi compartment function in the generation of the compositional and functional boundary between the widely distributed ER and the more centrally located Golgi stacks.