Proteins containing ubiquitin-binding domains (UBDs) interact with ubiquitinated targets and regulate diverse biological processes, including endocytosis, signal transduction, transcription and DNA repair 1-3 . Many of the UBD-containing proteins are also themselves monoubiquitinated, but the functional role and the mechanisms that underlie this modification are less well understood. Here, we demonstrate that monoubiquitination of the endocytic proteins Sts1, Sts2, Eps15 and Hrs results in intramolecular interactions between ubiquitin and their UBDs, thereby preventing them from binding in trans to ubiquitinated targets. Permanent monoubiquitination of these proteins, mimicked by the fusion of ubiquitin to their carboxyl termini, impairs their ability to regulate trafficking of ubiquitinated receptors. Moreover, we mapped the in vivo monoubiquitination site in Sts2 and demonstrated that its mutation enhances the Sts2-mediated effects of epidermal-growth-factor-receptor downregulation. We propose that monoubiquitination of ubiquitin-binding proteins inhibits their capacity to bind to and control the functions of ubiquitinated targets in vivo.The attachment of a single ubiquitin molecule (monoubiquitin) to a variety of cell-surface receptors is sufficient to drive their internalization and degradation 2,4-6 . Several endocytic adaptor proteins that control these processes -such as Eps15, epsins and Hrs -harbour one or more ubiquitin-binding domains (UBDs) that are able to recognize the ubiquitinated receptors and sort them along the endocytic pathway 2 . Interestingly, UBDs often mediate monoubiquitination of the proteins that contain them 2,3,7 . However, it is not yet understood whether and how monoubiquitination of ubiquitin-binding proteins may contribute to the regulation of their functions in vivo.The suppressors of T-cell receptor signalling (Sts) 1 and 2 are ubiquitin-binding proteins that suppress signalling via T-cell receptors 8 and regulate endocytic sorting of receptor tyrosine kinases 9,10 . Sts1 and Sts2