Ligand-induced desensitization of the epidermal growth factor receptor (EGFR) is controlled by c-Cbl, a ubiquitin ligase that binds multiple signaling proteins, including the Grb2 adaptor. Consistent with a negative role for c-Cbl, here we report that defective Tyr1045 of EGFR, an inducible c-Cbl docking site, enhances the mitogenic response to EGF. Signaling potentiation is due to accelerated recycling of the mutant receptor and a concomitant defect in ligand-induced ubiquitylation and endocytosis of EGFR. Kinetic as well as morphological analyses of the internalization-defective mutant receptor imply that c-Cbl-mediated ubiquitylation sorts EGFR to endocytosis and to subsequent degradation in lysosomes. Unexpectedly, however, the mutant receptor displayed significant residual ligand-induced ubiquitylation, especially in the presence of an overexpressed c-Cbl. The underlying mechanism seems to involve recruitment of a Grb2 c-Cbl complex to Grb2-specific docking sites of EGFR, and concurrent acceleration of receptor ubiquitylation and desensitization. Thus, in addition to its well-characterized role in mediating positive signals, Grb2 can terminate signal transduction by accelerating c-Cbl-dependent sorting of active tyrosine kinases to destruction.