Ubiquitin regulates protein transport between membrane compartments by serving as a sorting signal on protein cargo and by controlling the activity of trafficking machinery. Monoubiquitin attached to integral plasma membrane proteins or to associated transport modifiers serves as a regulated signal for internalization into the endocytic pathway. Similarly, monoubiquitin attached to biosynthetic and endocytic membrane proteins is a signal for sorting of cargo into vesicles that bud into the late endosome lumen for delivery into the lysosome. Ubiquitination of trans-acting endocytic proteins is also required for transport, and key endocytic proteins are modified by monoubiquitin. Regulatory enzymes of the ubiquitination machinery, ubiquitin ligases, control the timing and specificity of plasma membrane protein downregulation in such diverse biological processes as cell fate specification and neurotransmission. Monoubiquitin signals appended by these ligases are recognized by endocytic proteins carrying ubiquitin-binding motifs, including UBA, UEV, UIM, and CUE domains. The UIM proteins epsins and Hrs are excellent candidates for adaptors that link ubiquitinated cargo to the clathrin-based sorting machinery at appropriate regions of the endosomal or plasma membranes. Other ubiquitin-binding proteins also play crucial roles in cargo transport, although in most cases the role of ubiquitin-binding is not defined. Ubiquitin-binding proteins such as epsins, Hrs, and Vps9 are monoubiquitinated, indicating the general nature of ubiquitin regulation in endocytosis and suggesting new models to explain how recognition of monoubiquitin signals may be regulated.