beta-Arrestins serve a dual regulatory role in the life cycle of G protein-coupled receptors such as the beta2-adrenergic receptor. First, they mediate rapid desensitization by binding to G protein-coupled receptor kinase-phosphorylated receptors. Second, they target the receptors for internalization into endosomal vesicles, wherein receptor dephosphorylation and resensitization occur. Here we report that phosphorylation of a carboxyl-terminal serine (Ser-412) in beta-arrestin1 regulates its endocytotic but not its desensitization function. Cytoplasmic beta-arrestin1 is constitutively phosphorylated and is recruited to the plasma membrane by agonist stimulation of the receptors. At the plasma membrane, beta-arrestin1 is rapidly dephosphorylated, a process that is required for its clathrin binding and receptor endocytosis but not for its receptor binding and desensitization. Once internalized, beta-arrestin1 is rephosphorylated. Thus, as with the classical endocytic adaptor protein complex AP2, beta-arrestin1 functions as a clathrin adaptor in receptor endocytosis which is regulated by dephosphorylation at the plasma membrane.