Numerous studies implicate proteasomes in the regulation of EGF receptor (EGFR) endocytosis on the basis of the ability of inhibitors to decrease EGFR degradation, but the exact mechanisms remain obscure. We demonstrated that EGFR itself is not a direct target for proteasome, since it is delivered to lysosomes intact. Evidence is presented that the inhibitory effect of MG132 on EGF degradation is due mostly to free ubiquitin depletion resultant from the suppression of proteasomal functioning by MG132. By subcellular fractionation, we show two MG132-sensitive steps in the EGFR degradation pathway: sorting from early (EE) to late (LE) endosomes, and late stage of LE maturation. MG132 treatment resulted in stabilization of EGFR tyrosine phosphorylation and its association with c-Cbl. Nevertheless, ubiquitination of EGFR at late stages of endocytosis was significantly lower than that in control cells. Highly ubiquitinated forms of EGFR demonstrated more sensitivity to MG132 treatment.