Understanding how axon guidance receptors are activated by their extracellular ligands to regulate growth cone motility is critical to learning how proper wiring is established during development. Roundabout (Robo) is one such guidance receptor that mediates repulsion from its ligand Slit in both invertebrates and vertebrates. Here we show that endocytic trafficking of the Robo receptor in response to Slit-binding is necessary for its repulsive signaling output. Dose-dependent genetic interactions and in vitro Robo activation assays support a role for Clathrin-dependent endocytosis, and entry into both the early and late endosomes as positive regulators of Slit-Robo signaling. We identify two conserved motifs in Robo's cytoplasmic domain that are required for its Clathrin-dependent endocytosis and activation in vitro; gain of function and genetic rescue experiments provide strong evidence that these trafficking events are required for Robo repulsive guidance activity in vivo. Our data support a model in which Robo's ligand-dependent internalization from the cell surface to the late endosome is essential for receptor activation and proper repulsive guidance at the midline by allowing recruitment of the downstream effector Son of Sevenless in a spatially constrained endocytic trafficking compartment.