Agonist-dependent internalization of G protein-coupled receptors via clathrin-coated pits is dependent on the adaptor protein beta-arrestin, which interacts with elements of the endocytic machinery such as AP2 and clathrin. For the beta(2)-adrenergic receptor (beta(2)AR) this requires ubiquitination of beta-arrestin by E3 ubiquitin ligase, Mdm2. Based on trafficking patterns and affinity of beta-arrestin, G protein-coupled receptors are categorized into two classes. For class A receptors (e.g. beta(2)AR), which recycle rapidly, beta-arrestin directs the receptors to clathrin-coated pits but does not internalize with them. For class B receptors (e.g. V2 vasopressin receptors), which recycle slowly, beta-arrestin internalizes with the receptor into endosomes. In COS-7 and human embryonic kidney (HEK)-293 cells, stimulation of the beta(2)AR or V2 vasopressin receptor leads, respectively, to transient or stable beta-arrestin ubiquitination. The time course of ubiquitination and deubiquitination of beta-arrestin correlates with its association with and dissociation from each type of receptor. Chimeric receptors, constructed by switching the cytoplasmic tails of the two classes of receptors (beta(2)AR and V2 vasopressin receptors), demonstrate reversal of the patterns of both beta-arrestin trafficking and beta-arrestin ubiquitination. To explore the functional consequences of beta-arrestin ubiquitination we constructed a yellow fluorescent protein-tagged beta-arrestin2-ubiquitin chimera that cannot be deubiquitinated by cellular deubiquitinases. This "permanently ubiquitinated" beta-arrestin did not dissociate from the beta(2)AR but rather internalized with it into endosomes, thus transforming this class A receptor into a class B receptor with respect to its trafficking pattern. Overexpression of this beta-arrestin ubiquitin chimera in HEK-293 cells also results in enhancement of beta(2)AR internalization and degradation. In the presence of N-ethylmaleimide (an inhibitor of deubiquitinating enzymes), coimmunoprecipitation of the receptor and beta-arrestin was increased dramatically, suggesting that deubiquitination of beta-arrestin triggers its dissociation from the receptor. Thus the ubiquitination status of beta-arrestin determines the stability of the receptor-beta-arrestin complex as well as the trafficking pattern of beta-arrestin.