VE-cadherin is an adhesion molecule critical to vascular barrier function and angiogenesis. VE-cadherin expression levels are regulated by p120 catenin, which prevents lysosomal degradation of cadherins by unknown mechanisms. To test whether the VE-cadherin cytoplasmic domain mediates endocytosis, and to elucidate the nature of the endocytic machinery involved, the VE-cadherin tail was fused to the interleukin (IL)-2 receptor (IL-2R) extracellular domain. Internalization assays demonstrated that the VE-cadherin tail dramatically increased endocytosis of the IL-2R in a clathrin-dependent manner. Interestingly, p120 inhibited VE-cadherin endocytosis via a mechanism that required direct interactions between p120 and the VE-cadherin cytoplasmic tail. However, p120 did not inhibit transferrin internalization, demonstrating that p120 selectively regulates cadherin internalization rather than globally inhibiting clathrin-dependent endocytosis. Finally, cell surface labeling experiments in cells expressing green fluorescent protein-tagged p120 indicated that the VE-cadherin–p120 complex dissociates upon internalization. These results support a model in which the VE-cadherin tail mediates interactions with clathrin-dependent endocytic machinery, and this endocytic processing is inhibited by p120 binding to the cadherin tail. These findings suggest a novel mechanism by which a cytoplasmic binding partner for a transmembrane receptor can serve as a selective plasma membrane retention signal, thereby modulating the availability of the protein for endo-lysosomal processing.