Ubiquitylation of membrane proteins has gained considerable interest in recent years. It has been recognized as a signal that negatively regulates the cell surface expression of many plasma membrane proteins both in yeast and in mammalian cells. Moreover, it is also involved in endoplasmic reticulum-associated degradation of membrane proteins, and it acts as a sorting signal both in the secretory pathway and in endosomes, where it targets proteins into multivesicular bodies in the lumen of vacuoles/lysosomes. In this review we discuss the progress in understanding these processes, achieved during the past several years.