Intracellular trafficking of the epidermal growth factor receptor (EGF-R) is regulated by receptor occupancy. To investigate this, we developed an assay to study endosomal sorting under steady-state conditions. Using a cell line transfected with EGF-R variants, we found that the fraction of internalized EGF.EGF-R complexes sorted to lysosomes was a function of the number of intracellular complexes and required sequences in the cytoplasmic domain of the receptor. As the number of intracellular occupied wild-type receptors increased from 3 x 10(2) to 2 x 10(5)/cell, the fraction of internalized EGF that was degraded dropped from 70 to 20%. Transforming growth factor-alpha, which dissociates from the EGF-R at endosomal pH, was degraded to a uniform extent of approximately 50% at all intracellular ligand concentrations. EGF internalized by receptors lacking a cytoplasmic domain (c'647) was degraded to an extent of only 5-10% independent of the number of intracellular complexes. Mutant receptors truncated either at residues 1022 or 973 displayed sorting patterns intermediate between wild-type and c'647 receptors. Despite large differences in their internalization rates, the fractional sorting patterns of c'1022 and c'973 receptors were indistinguishable. Receptor tyrosine kinase activity appeared to have a small effect on sorting pattern, but only in the context of full-length receptors. Our results indicate that the default pathway of internalized receptors is rapidly recycling and that lysosomal targeting of occupied EGF-R is due to endosomal retention that is both specific and saturable. In addition, internalization and endosomal retention of EGF-R appear to be mediated by distinct structural elements.