The Nef protein of human immunodeficiency virus type 1 downregulates the CD4 coreceptor from the surface of host cells by accelerating the rate of CD4 endocytosis through a clathrin/AP-2 pathway. Herein, we report that Nef has the additional function of targeting CD4 to the multivesicular body (MVB) pathway for eventual delivery to lysosomes. This targeting involves the endosomal sorting complex required for transport (ESCRT) machinery. Perturbation of this machinery does not prevent removal of CD4 from the cell surface but precludes its lysosomal degradation, indicating that accelerated endocytosis and targeting to the MVB pathway are separate functions of Nef. We also show that both CD4 and Nef are ubiquitinated on lysine residues, but this modification is dispensable for Nef-induced targeting of CD4 to the MVB pathway.