The sorting of membrane proteins to the lysosome requires tyrosine- or dileucine-based targeting signals. Recycling receptors have similar signals, yet these proteins seldom enter the latter stages of the endocytic pathway. To determine how lysosomal and internalization signals differ, we prepared chimeric molecules consisting of the cytoplasmic tails of CD3 γ-chain, lysosomal acid phosphatase, and lysosomal-associated membrane glycoprotein- 1, each fused to the transmembrane and extracellular domains of the transferrin receptor (TR). Each chimera was expressed on the cell surface and rapidly internalized. Metabolic pulse-chase experiments showed that the CD3 γ-chain and lysosomal acid phosphatase chimeras, unlike the lysosomal- associated membrane glycoprotein chimera, were rapidly degraded in a post- Golgi compartment following normal glycosylation. Transplantation of signals from CD3 γ-chain and lysosomal acid phosphatase into the TR cytoplasmic tail in place of the native signal, Y20TRF23, indicated that each signal was sufficient to promote endocytosis but not lysosomal targeting of the resulting mutant. Transplantation of two CD3 signals at specific sites in the TR cytoplasmic tail or a single tyrosine-based signal in a truncated TR tail, however, was sufficient to promote lysosomal targeting. Our results therefore suggest that the relative position of the signal within the cytoplasmic tall is a critical feature that distinguishes lysosomal targeting signals from internalization signals.