Cigarette smoking is a risk factor for developing chronic obstructive pulmonary disease and protein aggresome formation is considered to be a hallmark event for the disease. Since dysfunction of lysosome-mediated protein degradation leads to enhanced accumulation of misfolded proteins and subsequent aggresome formation, we examined the effect of cigarette smoke extract (CSE) on ESCRT-mediated sorting in S. cerevisiae as this process is necessary for the functioning of the vacuole, the lysosomal equivalent in yeast. An operational ESCRT pathway is essential for ion homeostasis and our observation that exposure to CSE caused increased sensitivity to LiCl indicated CSE-induced impairment of ESCRT function. To confirm the inhibition of ESCRT function, the targeting of carboxypeptidase S (CPS), which reaches the vacuole lumen via the ESCRT pathway, was examined. Treatment with CSE resulted in the mislocalization of GFP-tagged CPS to the vacuolar membrane, instead of the vacuolar lumen, confirming defective functioning of the ESCRT machinery in CSE-treated cells. Further analysis revealed that CSE-treatment inhibited the recruitment of the ESCRT-0 component, Vps27, to the endosome surface, which is a key event is for the functioning of the ESCRT pathway. This lack of endosomal recruitment of Vps27 most likely results from a depletion of the endosomally-enriched lipid, phosphatidylinositol 3-phosphate (PI3-P), which is the target of Vps27. This is supported by our observation that the presence of excess leucine, a known activator of the lipid kinase responsible for the generation of PI3-P, Vps34, in the medium can rescue the CSE-induced ESCRT misfunctioning. Thus, the current study provides an insight into CSE-induced aggresome formation as it documents that CSE treatment compromises vacuolar degradation due to an impairment of the ESCRT pathway, which likely stems from the inhibition of Vps34. It also indicates that leucine has the potential to attenuate the CSE-induced accumulation of misfolded proteins.