Ubiquitin functions as a signal for sorting cargo at multiple steps of the endocytic pathway and controls the activity of trans-acting components of the endocytic machinery (reviewed in refs , and ). By contrast to proteasome degradation, which generally requires a polyubiquitin chain that is at least four subunits long^,, internalization and sorting of endocytic cargo at the late endosome are mediated by mono-ubiquitination^,,,. Here, we demonstrate that ubiquitin-interacting motifs (UIMs) found in epsins and Vps27p (ref. ) from Saccharomyces cerevisiae are required for ubiquitin binding and protein transport. Epsin UIMs are important for the internalization of receptors into vesicles at the plasma membrane. Vps27p UIMs are necessary to sort biosynthetic and endocytic cargo into vesicles that bud into the lumen of a late endosomal compartment, the multivesicular body. We propose that mono-ubiquitin regulates internalization and endosomal sorting by interacting with modular ubiquitin-binding domains in core components of the protein transport machinery. UIM domains are found in a broad spectrum of proteins, consistent with the idea that mono-ubiquitin can function as a regulatory signal to control diverse biological activities.