Neuropeptide signaling requires the presence of G protein-coupled receptors (GPCRs) at the cell surface. Activated GPCRs interact with β-arrestins, which mediate receptor desensitization, endocytosis, and mitogenic signaling, and the peptide–receptor–arrestin complex is sequestered into endosomes. Although dissociation of β-arrestins is required for receptor recycling and resensitization, the critical event that initiates this process is unknown. Here we report that the agonist availability in the endosomes, controlled by the membrane metalloendopeptidase endothelin-converting enzyme 1 (ECE-1), determines stability of the peptide–receptor–arrestin complex and regulates receptor recycling and resensitization. Substance P (SP) binding to the tachykinin neurokinin 1 receptor (NK₁R) induced membrane translocation of β-arrestins followed by trafficking of the SP–NK₁R–β-arrestin complex to early endosomes containing ECE-1a–d. ECE-1 degraded SP in acidified endosomes, disrupting the complex; β-arrestins returned to the cytosol, and the NK₁R, freed from β-arrestins, recycled and resensitized. An ECE-1 inhibitor, by preventing NK₁R recycling in endothelial cells, inhibited resensitization of SP-induced inflammation. This mechanism is a general one because ECE-1 similarly regulated NK₃R resensitization. Thus, peptide availability in endosomes, here regulated by ECE-1, determines the stability of the peptide–receptor–arrestin complex. This mechanism regulates receptor recycling, which is necessary for sustained signaling, and it may also control β-arrestin-dependent mitogenic signaling of endocytosed receptors. We propose that other endosomal enzymes and transporters may similarly control the availability of transmitters in endosomes to regulate trafficking and signaling of GPCRs. Antagonism of these endosomal processes represents a strategy for inhibiting sustained signaling of receptors, and defects may explain the tachyphylaxis of drugs that are receptor agonists.