Cbl proteins have been implicated in the regulation of endocytic trafficking of epidermal growth factor receptor. However, the precise role of Cbl in epidermal growth factor receptor endocytosis is not defined. To directly visualize Cbl in cells and perform structure-function analysis of Cbl's role in epidermal growth factor receptor internalization, a yellow fluorescent protein-fusion of c-Cbl was constructed. Upon epidermal growth factor receptor activation, Cbl-yellow fluorescent protein moved with epidermal growth factor receptor to clathrin-coated pits and endosomes. Localization of Cbl-yellow fluorescent protein to these endocytic organelles was dependent on a proline-rich domain of c-Cbl that interacts with Grb2 as shown by fluorescence resonance energy transfer microscopy. In contrast, direct binding of Cbl to phosphotyrosine 1045 of the epidermal growth factor receptor was required for epidermal growth factor receptor polyubiquitination, but was not essential for Cbl-yellow fluorescent protein localization in epidermal growth factor receptor-containing compartments. These data suggest that the binding of Cbl to epidermal growth factor receptor through Grb2 is necessary and sufficient for Cbl function during clathrin-mediated endocytosis. Overexpression of c-Cbl mutants that are capable of Grb2 binding but defective in linker/RING finger domain function severely inhibited epidermal growth factor receptor internalization. The same dominant-negative mutants of Cbl did not block epidermal growth factor receptor recruitment into coated pits but retained receptors in coated pits, thus preventing receptor endocytosis and transport to endosomes. These data suggest that the linker and RING finger domain of Cbl may function during late steps of coated vesicle formation. We propose that the RING domain of Cbl facilitates endocytosis either by epidermal growth factor receptor monoubiquitylation or by ubiquitylation of proteins associated with the receptor.