To reach the lysosomes, down-regulated receptors such as the epidermal growth factor receptor must first be sorted into internal vesicles of late endosomes (multivesicular bodies), a ubiquitin-dependent event that requires the coordinated function of the endosome sorting complex required for transport (ESCRT) proteins. Here we report that CHMP3, an ESCRT-III complex component, and associated molecule of SH3 domain of STAM (AMSH), a deubiquitinating enzyme, interact with each other in cells. A dominant-negative version of CHMP3, which specifically prevents targeting of AMSH to endosomes, inhibits degradation but not internalization of EGFR, suggesting that endosomal AMSH is a functional component of the multivesicular body pathway.