The receptor tyrosine kinase (RTK) Ret is activated by the formation of a complex consisting of ligands such as glial cell line-derived neurotrophic factor (GDNF) and glycerophosphatidylinositol-anchored coreceptors termed GFRalphas. During activation, Ret translocates into lipid rafts, which is critical for functional responses to GDNF. We found that Ret was rapidly ubiquitinated and degraded in sympathetic neurons when activated with GDNF, but, unlike other RTKs that are trafficked to lysosomes for degradation, Ret was degraded predominantly by the proteasome. After GDNF stimulation, the majority of ubiquitinated Ret was located outside of lipid rafts and Ret was lost predominantly from nonraft membrane domains. Consistent with the predominance of Ret degradation outside of rafts, disruption of lipid rafts in neurons did not alter either the GDNF-dependent ubiquitination or degradation of Ret. GDNF-mediated survival of sympathetic neurons was inhibited by lipid raft depletion, and this inhibitory effect of raft disruption on GDNF-mediated survival was reversed if Ret degradation was blocked via proteasome inhibition. Therefore, lipid rafts sequester Ret away from the degradation machinery located in nonraft membrane domains, such as Cbl family E3 ligases, thereby sustaining Ret signaling.