Ligand binding to receptor tyrosine kinases and G-protein-coupled receptors initiates signal transduction events and induces receptor endocytosis via clathrin-coated pits and vesicles. While receptor-mediated endocytosis has been traditionally considered an effective mechanism to attenuate ligand-activated responses, more recent studies demonstrate that signaling continues on the endocytic pathway. In fact, certain signaling events, such as the activation of the extracellular signal-regulated kinases, appear to require endocytosis. Protein components of signal transduction cascades can assemble at clathrin coated pits and remain associated with endocytic vesicles following their dynamin-dependent release from the plasma membrane. Thus, endocytic vesicles can function as a signaling compartment distinct from the plasma membrane. These observations demonstrate that endocytosis plays an important role in the activation and propagation of signaling pathways.