Vascular endothelial growth factor A (VEGF-A)-induced signaling through VEGF receptor 2 (VEGFR2) regulates both physiological and pathological angiogenesis in mammals. However, the temporal and spatial mechanism underlying VEGFR2-mediated intracellular signaling is not clear. Here, we define a pathway for VEGFR2 trafficking and proteolysis that regulates VEGF-A-stimulated signaling and endothelial cell migration. Ligand-stimulated VEGFR2 activation and ubiquitination preceded proteolysis and cytoplasmic domain removal associated with endosomes. A soluble VEGFR2 cytoplasmic domain fragment displayed tyrosine phosphorylation and activation of downstream intracellular signaling. Perturbation of endocytosis by the depletion of either clathrin heavy chain or an ESCRT-0 subunit caused differential effects on ligand-stimulated VEGFR2 proteolysis and signaling. This novel VEGFR2 proteolysis was blocked by the inhibitors of 26S proteasome activity. Inhibition of proteasome activity prolonged VEGF-A-induced intracellular signaling to c-Akt and endothelial nitric oxide synthase (eNOS). VEGF-A-stimulated endothelial cell migration was dependent on VEGFR2 and VEGFR tyrosine kinase activity. Inhibition of proteasome activity in this assay stimulated VEGF-A-mediated endothelial cell migration. VEGFR2 endocytosis, ubiquitination and proteolysis could also be stimulated by a protein kinase C-dependent pathway. Thus, removal of the VEGFR2 carboxyl terminus linked to phosphorylation, ubiquitination and trafficking is necessary for VEGF-stimulated endothelial signaling and cell migration.