Sorting of ubiquitinated endosomal membrane proteins into the MVB pathway is executed by the class E Vps protein complexes ESCRT-I, -II, and -III, and the AAA-type ATPase Vps4. This study characterizes ESCRT-II, a soluble approximately 155 kDa protein complex formed by the class E Vps proteins Vps22, Vps25, and Vps36. This protein complex transiently associates with the endosomal membrane and thereby initiates the formation of ESCRT-III, a membrane-associated protein complex that functions immediately downstream of ESCRT-II during sorting of MVB cargo. ESCRT-II in turn functions downstream of ESCRT-I, a protein complex that binds to ubiquitinated endosomal cargo. We propose that the ESCRT complexes perform a coordinated cascade of events to select and sort MVB cargoes for delivery to the lumen of the vacuole/lysosome.