Endocytosis of activated receptors can control signaling levels by exposing the receptors to novel downstream molecules or by instigating their degradation. Epidermal growth factor receptor (EGFR) signaling has crucial roles in development and is misregulated in many cancers. We report here that Myopic, the Drosophila homolog of the Bro1-domain tyrosine phosphatase HD-PTP, promotes EGFR signaling in vivo and in cultured cells. myopic is not required in the presence of activated Ras or in the absence of the ubiquitin ligase Cbl, indicating that it acts on internalized EGFR, and its overexpression enhances the activity of an activated form of EGFR. Myopic is localized to intracellular vesicles adjacent to Rab5-containing early endosomes, and its absence results in the enlargement of endosomal compartments. Loss of Myopic prevents cleavage of the EGFR cytoplasmic domain, a process controlled by the endocytic regulators Cbl and Sprouty. We suggest that Myopic promotes EGFR signaling by mediating its progression through the endocytic pathway.