The two major cellular sites for membrane protein degradation are the proteasome and the lysosome. Ubiquitin attachment is a sorting signal for both degradation routes. For lysosomal degradation, ubiquitination triggers the sorting of cargo proteins into the lumen of late endosomal multivesicular bodies (MVBs)/endosomes. MVB formation occurs when a portion of the limiting membrane of an endosome invaginates and buds into its own lumen. Intralumenal vesicles are degraded when MVBs fuse to lysosomes. The proper delivery of proteins to the MVB interior relies on specific ubiquitination of cargo, recognition and sorting of ubiquitinated cargo to endosomal subdomains, and the formation and scission of cargo-filled intralumenal vesicles. Over the past five years, a number of proteins that may directly participate in these aspects of MVB function and biogenesis have been identified. However, major questions remain as to exactly what these proteins do at the molecular level and how they may accomplish these tasks.