The epidermal growth factor receptor (EGFR) is a critical determinator of cell fate. Signalling from this receptor tyrosine kinase is spatially regulated by progression through the endocytic pathway, governing receptor half-life and accessibility to signalling proteins and phosphatases. Endocytosis of EGFR is required for interaction with the protein tyrosine phosphatase PTP1B (ref. ), which localizes to the cytoplasmic face of the endoplasmic reticulum (ER), raising the question of how PTP1B comes into contact with endosomal EGFR. We show that EGFR–PTP1B interaction occurs by means of direct membrane contacts between the perimeter membrane of multivesicular bodies (MVBs) and the ER. The population of EGFR interacting with PTP1B is the same population that undergo ESCRT-mediated (endosomal sorting complex required for transport) sorting within MVBs, and PTP1B activity promotes the sequestration of EGFR on to MVB internal vesicles. Membrane contacts between endosomes and the ER form in both the presence and absence of stimulation by EGF. Thus membrane contacts between endosomes and the ER may represent a global mechanism for direct interaction between proteins on these two organelles.