We have previously shown that the protein Eps15 is constitutively associated with the plasma membrane adaptor complex, AP-2, suggesting its possible role in endocytosis. To explore the role of Eps15 and the function of AP-2/Eps15 association in endocytosis, the Eps15 binding domain for AP-2 was precisely delineated. The entire COOH-terminal domain of Eps15 or a mutant form lacking all the AP-2–binding sites was fused to the green fluorescent protein (GFP), and these constructs were transiently transfected in HeLa cells. Overexpression of the fusion protein containing the entire COOH-terminal domain of Eps15 strongly inhibited endocytosis of transferrin, whereas the fusion protein in which the AP-2–binding sites had been deleted had no effect. These results were confirmed in a cell-free assay that uses perforated A431 cells to follow the first steps of coated vesicle formation at the plasma membrane. Addition of Eps15-derived glutathione-S-transferase fusion proteins containing the AP-2–binding site in this assay inhibited not only constitutive endocytosis of transferrin but also ligand-induced endocytosis of epidermal growth factor. This inhibition could be ascribed to a competition between the fusion protein and endogenous Eps15 for AP-2 binding. Altogether, these results show that interaction of Eps15 with AP-2 is required for efficient receptor-mediated endocytosis and thus provide the first evidence that Eps15 is involved in the function of plasma membrane–coated pits.