The hematopoietic system provides an attractive model for studying growth factor-controlled expansion and differentiation of cells in relation to receptor routing and its consequences for signal transduction. Suppressor of cytokine signaling ( SOCS) proteins regulate receptor signaling partly via their ubiquitin ligase (E3)-recruiting SOCS box domain. Whether SOCS proteins affect signaling through modulating intracellular trafficking of receptors is unknown. Here, we show that a juxtamembrane lysine residue (K632) of the granulocyte colony-stimulating factor receptor (G-CSFR) plays a key role in receptor routing and demonstrate that the effects of SOCS3 on G-CSF signaling to a major extent depend on this lysine. Mutation of K632 causes accumulation of G-CSFR in early endosomes and leads to sustained activation of signal transducer and activator of transcription 5 and ERK, but not protein kinase B. Myeloid progenitors expressing G-CSFR mutants lacking K632 show a perturbed proliferation/differentiation balance in response to G-CSF. This is the first demonstration of SOCS-mediated ubiquitination and routing of a cytokine receptor and its impact on maintaining an appropriate signaling output.