Endocytosis in eukaryotic cells is characterized by the continuous and regulated formation of prolific numbers of membrane vesicles at the plasma membrane. These vesicles come in several different varieties, ranging from the actin-dependent formation of phagosomes involved in particle uptake, to smaller clathrin-coated vesicles responsible for the internalization of extracellular fluid and receptor-bound ligands. In general, each of these vesicle types results in the delivery of their contents to lysosomes for degradation. The membrane components of endocytic vesicles, on the other hand, are subject to a series of highly complex and iterative molecular sorting events resulting in their targeting to specific destinations. In recent years, much has been learned about the function of the endocytic pathway and the mechanisms responsible for the molecular sorting of proteins and lipids. This review attempts to integrate these new concepts with long-established views of endocytosis to present a more coherent picture of how the endocytic pathway is organized and how the intracellular transport of internalized membrane components is controlled. Of particular importance are emerging concepts concerning the protein-based signals responsible for molecular sorting and the cytosolic complexes responsible for the decoding of these signals.