We have studied the endosome-lysosome transfer of internalized epidermal growth factor receptor (EGFR) complexes in a cell-free system from rat liver. Analytical subfractionation of a postmitochondrial supernatant fraction showed that a pulse of internalized [¹²⁵I]EGF was largely associated with a light endosomal fraction devoid of lysosomal markers. After an additional 30 min incubation in vitro in the presence of an ATP-regenerating system, the amount of [¹²⁵I]EGF in this compartment decreased by 39%, with an increase in [¹²⁵I]EGF in lysosomes. No transfer of [¹²⁵I]EGF to the cytosol was detected. To assess the fate of the internalized EGFR protein over the time course of the endo-lysosomal transfer of the ligand, the effect of a saturating dose of native EGF on subsequent lysosomal targeting of the EGFR was evaluated by immunoblotting. A massive translocation of the EGFR to the endosomal compartment was observed in response to ligand injection coincident with its tyrosine phosphorylation and receptor recruitment of the tyrosine-phosphorylated adaptor protein Shc. During cell-free endosome-lysosome fusion, a time-dependent increase in the content of the EGFR and the two 55- and 46-kDa Shc isoforms was observed in lysosomal fractions with a time course superimposable with the lysosomal transfer of the ligand; no transfer of the 66-kDa Shc isoform was detected. The relationship between EGFR tyrosine kinase activity and EGFR sorting in endosomes investigated by immunoblot studies with anti-phosphotyrosine antibodies revealed that endosomal dephosphorylation of EGFR and Shc preceded lysosomal transfer. These results support the view that a lysosomal targeting machinery distinct from the endosomal receptor kinase activity, such as the recruitment of the signaling molecule Shc, may regulate this sorting event in the endosome.