Endocytosis is an important regulator of cell-cell signaling and endocytic trafficking has been increasingly implicated in control of tumor suppression. Recent insights from Drosophila indicate that impairment of multiple trafficking steps which lead to receptor degradation can cause tumor formation in epithelial organs. These tumors are characterized by sustained activation of a number of mitogenic signaling pathways, and by subversion of epithelial polarity and the apoptotic response. Cooperation between such alterations, as well as tumor-host interactions, is also observed. The recapitulation of several hallmarks of human cancers in fly tumors provides a framework to understand the role of defective endocytosis in cancer.