Aquaporin 4 (AQP4) is the predominant water channel in the brain. It is targeted to specific membrane domains of astrocytes and plays a crucial role in cerebral water balance in response to brain edema formation. AQP4 is also specifically expressed in the basolateral membranes of epithelial cells. However, the molecular mechanisms involved in its polarized targeting and membrane trafficking remain largely unknown. Here, we show that two independent C-terminal signals determine AQP4 basolateral membrane targeting in epithelial MDCK cells. One signal involves a tyrosine-based motif; the other is encoded by a di-leucine-like motif. We found that the tyrosine-based basolateral sorting signal also determines AQP4 clathrin-dependent endocytosis through direct interaction with the mu subunit of AP2 adaptor complex. Once endocytosed, a regulated switch in mu subunit interaction changes AP2 adaptor association to AP3. We found that the stress-induced kinase casein kinase (CK)II phosphorylates the Ser276 immediately preceding the tyrosine motif, increasing AQP4-mu 3A interaction and enhancing AQP4-lysosomal targeting and degradation. AQP4 phosphorylation by CKII may thus provide a mechanism that regulates AQP4 cell surface expression.