Loss of ESCRT function in Drosophila imaginal discs is known to cause neoplastic overgrowth fueled by mis-regulation of signaling pathways. Its impact on junctional integrity, however, remains obscure. To dissect the events leading to neoplasia, we used transmission electron microscopy (TEM) on wing imaginal discs temporally depleted of the ESCRT-III core component Shrub. We find a specific requirement for Shrub in maintaining septate junction (SJ) integrity by transporting the claudin Megatrachea (Mega) to the SJ. In absence of Shrub function, Mega is lost from the SJ and becomes trapped on endosomes coated with the endosomal retrieval machinery retromer. We show that ESCRT function is required for apical localization and mobility of retromer positive carrier vesicles, which mediate the biosynthetic delivery of Mega to the SJ. Accordingly, loss of retromer function impairs the anterograde transport of several SJ core components, revealing a novel physiological role for this ancient endosomal agent.