The m4 subtype of muscarinic acetylcholine receptor regulates many physiological processes and is a novel therapeutic target for neurologic and psychiatric disorders. However, little is known about m4 regulation because of the lack of pharmacologically selective ligands. A crucial component of G protein-coupled receptor regulation is intracellular trafficking. We thus used subtype-specific antibodies and quantitative immunocytochemistry to characterize the intracellular trafficking of m4. We show that following carbachol stimulation, m4 co-localizes with transferrin, and the selective marker of early endosomes, EEA1. In addition, m4 intracellular localization depends on Rab5 activity. The dominant negative Rab5S34N inhibits m4 endocytosis initially following carbachol stimulation, and reduces the size of m4 containing vesicles. The constitutively active Rab5Q79L enhances m4 intracellular distribution, even in unstimulated cells. Rab5Q79L also produces strikingly enlarged vacuoles, which by electron microscopy contain internal vesicles, suggesting that they are multivesicular bodies. m4 localizes both to the perimeter and interior of these vacuoles. In contrast, transferrin localizes only to the vacuole perimeter, demonstrating divergence of m4 trafficking from the pathway followed by constitutively endocytosed transferrin. We thus suggest a novel model by which multivesicular bodies sort G protein-coupled receptors from a transferrin-positive recycling pathway to a nonrecycling, possibly degradative pathway.