Tropomyosin-related kinase A (TrkA) receptor mediates the effects exerted by nerve growth factor on several subpopulations of neuronal cells. Ligand binding to TrkA induces receptor autophosphorylation on several tyrosine residues and the activation of signaling cascades. In this study, we describe a new site relevant for TrkA regulation, the tyrosine 701 (Y701), which is important for receptor trafficking and activation. Y701 replacement by aspartate or phenylalanine reduces receptor internalization rate and decreases the colocalization and association of TrkA with clathrin heavy chain, demonstrating that Y701 constitutes a YxxPhi (YRKF701-704) trafficking motif relevant for the regulation of receptor endocytosis. In accordance with this hypothesis, the colocalization of Y701 mutant receptors with a lysosomal marker is also reduced giving support to the involvement of the YRKF701-704 motif in the lysosomal targeting of TrkA receptors. Contrary to what was expected, substitution of Y701 for an Asp in order to mimic phosphorylation, impairs TrkA ability to mediate nerve growth factor-induced differentiation, although the mutant receptor retains its in vitro kinase activity. This is the first evidence that a Tyr residue can simultaneously regulate TrkA receptor trafficking and activity.