The nerve growth factor receptor TrkA (tropomyosin-related kinase receptor) participates in the survival and differentiation of several neuronal populations. The C-terminal tail of TrkA contains a PPXY motif, the binding site of the E3 ubiquitinligase Nedd4-2 (neural precursor cell expressed, developmentally down-regulated 4-2). In order to analyze the role of Nedd4-2 ubiquitination on TrkA function, we generated three TrkA mutants, by introducing point mutations on conserved hydrophobic amino acids – Leu784 and Val790 switched to Ala. TrkA mutants co-localized and co-immunoprecipitated more efficiently with Nedd4-2 and consequently a strong increase in the basal multimonoubiquitination of the mutant receptors was observed. In addition, we found a decrease in TrkA abundance because of the preferential sorting of mutant receptors towards the late endosome/lysosome pathway instead of recycling back to the plasma membrane. Despite the reduction in the amount of membrane receptor caused by the C-terminal changes, TrkA mutants were able to activate signaling cascades and were even more efficient in promoting neurite outgrowth than the wild-type receptor. Our results demonstrate that the C-terminal tail hydrophobicity of TrkA regulates Nedd4-2 binding and activity and therefore controls receptor turnover. In addition, TrkA multimonoubiquitination does not interfere with the activation of signaling cascades, but rather potentiates receptor signaling leading to differentiation.