Based on the observations that Grb2 overexpression altered the trafficking route of amyloid-β protein precursor (AβPP) by inhibiting its release via exosomal vesicles, and subsequently increased its endogenous level, in the present study we aimed to elucidate the mechanism of traffic impairment and the role of different Grb2 domains in this process. We found that the N-SH3 domain of Grb2 was involved in the protein vesicular localization. The C-SH3 domain could also form very small puncta, but were not characteristic Grb2 containing vesicles. Vesicles containing the N-SH3-SH2 domain had a mixed population of early and late endosomes but C-SH3-SH2 domain containing vesicles were of early endosomal type. The N-SH3 domain therefore seems to be involved in the maturation of early endosomes to late endosomes. Almost all the features shown by overexpression of full-length type Grb2, for example, entrapment of endogenous AβPP in vesicles, affecting the turnover of AβPP in terms of decrease in exosomal release and increase in endogenous concentration of the protein, could be reproduced by the N-SH3-SH2 domain and, to a very limited extent, by the C-SH3-SH2 domain. The middle SH2 domain alone did not show any involvement in AβPP trafficking. By mutational analysis of both N and C terminal SH3 domains, attempts were made to elucidate the molecular basis of this functional anomaly.