Endocytosis and subsequent lysosomal degradation of activated signalling receptors can attenuate signalling. Endocytosis may also promote signalling by targeting receptors to specific compartments. A key step regulating the degradation of receptors is their ubiquitination. Hrs/Vps27p, an endosome-associated, ubiquitin-binding protein, affects sorting and degradation of receptors. Drosophila embryos mutant for hrs show elevated receptor tyrosine kinase (RTK) signalling. Hrs has also been proposed to act as a positive mediator of TGF-beta signalling. We find that Drosophila epithelial cells devoid of Hrs accumulate multiple signalling receptors in an endosomal compartment with high levels of ubiquitinated proteins: not only RTKs (EGFR and PVR) but also Notch and receptors for Hedgehog and Dpp (TGF-beta related). Hrs is not required for Dpp signalling. Instead, loss of Hrs increases Dpp signalling and the level of the type-I receptor Thickveins (Tkv). Finally, most hrs-dependent receptor turnover appears to be ligand independent. Thus, both active and inactive signalling receptors are targeted for degradation in vivo and Hrs is required for their removal.