The ubiquitin-dependent protein degradation system has recently been implicated in downregulation of signal transducing receptors. Growth hormone receptor (GHR) cDNA was transfected into Chinese hamster ovary cells, which exhibit a temperature-sensitive defect in ubiquitin conjugation (CHO-ts20), as well as into wild-type cells (CHO-E36). Upon binding of growth hormone (GH), two GHR polypeptides dimerize and initiate signal transduction. In CHO-E36 and in CHO-ts20 at the permissive temperature the GHR was ubiquitinated and degraded in a GH-dependent fashion. However, at the non-permissive temperature in CHO-ts20 cells, neither GH-dependent uptake nor degradation of the GHR was observed, while in CHO-E36 cells both GHR uptake and degradation were accelerated. Incubation of CHO-E36 cells with inhibitors of endosomal/lysosomal function (NH4Cl, bafilomycin A1) markedly reduced ligand-induced GHR degradation. Our results indicate that a functional ubiquitin conjugating system is required for GH-induced endocytosis and that degradation of both the exoplasmic and cytoplasmic portions of the GHR occurs within the endosomal/lysosomal compartment.