Endocytosis marks the entry of internalized receptors into the complex network of endocytic trafficking pathways. Endocytic vesicles are rapidly targeted to a distinct membrane-bound endocytic organelle referred to as the early endosome. Despite the existence of numerous internalization routes, early endosomes (EE) serve as a focal point of the endocytic pathway. Sorting events initiated at this compartment determine the subsequent fate of internalized proteins and lipids, destining them either for recycling to the plasma membrane, degradation in lysosomes or delivery to the trans-Golgi network. Sorting of endocytic cargo to the latter compartments is accomplished through the formation of distinct microdomains within early endosomes, through the coordinate recruitment and assembly of the sorting machinery. An elaborate network of interactions between endocytic regulatory proteins ensures synchronized sorting of cargo to microdomains followed by morphological changes at the early endosomal membranes. Consequently, the cargo targeted either for recycling back to the plasma membrane, or for retrograde transport to the trans-Golgi network, localizes to newly-formed tubular membranes. With a high ratio of membrane surface to lumenal volume, these tubules effectively concentrate the recycling cargo, ensuring efficient transport out of the EE. Conversely, receptors sorted for degradation cluster at the flat clathrin lattices involved in invaginations of the limiting membrane, associating with newly formed intralumenal vesicles. In this review we will discuss the characteristics of early endosomes, their role in the regulation of endocytic transport, and their aberrant function in a variety of diseases.