Reactive oxygen species (ROS) generated by NADPH oxidases (Nox) have been implicated in the regulation of signal transduction. However, the cellular mechanisms that link Nox activation with plasma membrane receptor signaling remain poorly defined. We have found that Nox2-derived ROS influence the formation of an active interleukin-1 (IL-1) receptor complex in the endosomal compartment by directing the H₂O₂-dependent binding of TRAF6 to the IL-1R1/MyD88 complex. Clearance of both superoxide and H₂O₂ from within the endosomal compartment significantly abrogated IL-1β-dependent IKK and NF-κB activation. MyD88-dependent endocytosis of IL-1R1 following IL-1β binding was required for the redox-dependent formation of an active endosomal receptor complex competent for IKK and NF-κB activation. Small interfering RNAs to either MyD88 or Rac1 inhibited IL-1β induction of endosomal superoxide and NF-κB activation. However, MyD88 and Rac1 appear to be recruited independently to IL-1R1 following ligand stimulation. In this context, MyD88 binding was required for inducing endocytosis of IL-1R1 following ligand binding, while Rac1 facilitated the recruitment of Nox2 into the endosomal compartment and subsequent redox-dependent recruitment of TRAF6 to the MyD88/IL-1R1 complex. The identification of Nox-active endosomes helps explain how subcellular compartmentalization of redox signals can be used to direct receptor activation from the plasma membrane.