Recent findings suggest that Delta/Serrate/Lag2 (DSL) signals activate Notch by an unprecedented mechanism that requires the ligands to be endocytosed in signal-sending cells to activate the receptor in signal-receiving cells. Here, we show that cells devoid of Epsin, a conserved adaptor protein for Clathrin-mediated endocytosis, behave normally except that they cannot send DSL signals. Surprisingly, we find that Epsin is not required for bulk endocytosis of DSL proteins. Instead, Epsin appears to be essential for targeting DSL proteins to a special endocytic pathway that they must enter to acquire signaling activity. We present evidence that DSL proteins must be mono-ubiquitinated to be targeted by Epsin to this pathway. Furthermore, we show that the requirements for both Epsin and mono-ubiquitination can be bypassed by introducing the internalization signal that mediates endocytosis and recycling of the Low Density Lipoprotein (LDL) receptor. We propose that Epsin is essential for DSL signaling because it targets mono-ubiquitinated DSL proteins to an endocytic recycling compartment that they must enter to be converted into active ligands. Alternatively Epsin may be required to target mono-ubiquitinated DSL proteins to a particular subclass of coated pits that have special properties essential for Notch activation.