The hematopoietic system provides an attractive model for studying growth factor-controlled expansion and differentiation of cells in relation to receptor routing and its consequences for signal transduction. Suppressor of cytokine signaling (SOCS) proteins regulate receptor signaling partly via their ubiquitin ligase (E3)-recruiting SOCS box domain. Whether SOCS proteins affect signaling through modulating intracellular trafficking of receptors is unknown. Here, we show that a juxtamembrane lysine residue (K632) of the granulocyte colony-stimulating factor receptor (G-CSFR) plays a key role in receptor routing and demonstrate that the effects of SOCS3 on G-CSF signaling to a major extent depend on this lysine. Mutation of K632 causes accumulation of G-CSFR in early endosomes and leads to sustained activation of signal transducer and activator of transcription 5 and ERK, but not protein kinase B. Myeloid progenitors expressing G-CSFR mutants lacking K632 show a perturbed proliferation/differentiation balance in response to G-CSF. This is the first demonstration of SOCS-mediated ubiquitination and routing of a cytokine receptor and its impact on maintaining an appropriate signaling output.