Endosomes are highly dynamic membrane systems that receive endocytosed plasma membrane proteins and sort them for either degradation or recycling back to the cell surface. In addition, they receive newly synthesised proteins destined for vacuolar/lysosomal compartments. Sorting in the endosomes is necessary for the establishment and maintenance of cell polarity and it is needed to control levels and function of receptors and transporters at the cellular surface. Both processes are crucial for correct cell behaviour during tissue and organ development and for intercellular communication in general. It has therefore become an imperative to investigate structure and function of the endosomal system if we want to obtain a deeper mechanistic understanding of signal transduction and development. This review will compare our current understanding of endosomal trafficking in animals and yeast with what is known in plants, and will highlight some important breakthroughs in our understanding of the role of endosomes in signal transduction and multicellular development in Drosophila, as well as in Arabidopsis.