Intracellular amyloid-β (Aβ) accumulation is a key feature of early Alzheimer's disease and precedes the appearance of Aβ in extracellular plaques. Aβ is generated through proteolytic processing of amyloid precursor protein (APP), but the intracellular site of Aβ production is unclear. APP has been localized to multivesicular bodies (MVBs) where sorting of APP onto intraluminal vesicles (ILVs) could promote amyloidogenic processing, or reduce Aβ production or accumulation by sorting APP and processing products to lysosomes for degradation. Here, we show that APP localizes to the ILVs of a subset of MVBs that also traffic EGF receptor (EGFR), and that it is delivered to lysosomes for degradation. Depletion of the endosomal sorting complexes required for transport (ESCRT) components, Hrs (also known as Hgs) or Tsg101, inhibited targeting of APP to ILVs and the subsequent delivery to lysosomes, and led to increased intracellular Aβ accumulation. This was accompanied by dramatically decreased Aβ secretion. Thus, the early ESCRT machinery has a dual role in limiting intracellular Aβ accumulation through targeting of APP and processing products to the lysosome for degradation, and promoting Aβ secretion.