One of the central issues facing the emerging field of nanotechnology is cellular compatibility. Nanoparticles have been proposed for diagnostic and therapeutic applications, including drug delivery, gene therapy, biological sensors, and controlled catalysis. Viruses, liposomes, peptides, and synthetic and natural polymers have been engineered for these applications, yet significant limitations continue to prevent their use. Avoidance of the body's natural immune system, lack of targeting specificity, and the inability to control packaging and release are remaining obstacles. We have explored the use of a naturally occurring cellular nanoparticle known as the vault, which is named for its morphology with multiple arches reminiscent of cathedral ceilings. Vaults are 13-MDa ribonucleoprotein particles with an internal cavity large enough to sequester hundreds of proteins. Here, we report a strategy to target and sequester biologically active materials within the vault cavity. Attachment of a vault-targeting peptide to two proteins, luciferase and a variant of GFP, resulted in their sequestration within the vault cavity. The targeted proteins confer enzymatic and fluorescent properties on the recombinant vaults, both of which can be detected by their emission of light. The modified vaults are compatible with living cells. The ability to engineer vault particles with designed properties and functionalities represents an important step toward development of a biocompatible nanocapsule.