The appropriate sorting of vesicular cargo, including cell-surface proteins, is critical for many cellular functions. Ubiquitinated cargo is targeted to endosomes and digested by lysosomal enzymes. We previously identified AMSH, a deubiquitination enzyme (DUB), to be involved in vesicular transport. Here, we purified an AMSH-binding protein, CHMP3, which is an ESCRT-III subunit. ESCRT-III functions on maturing endosomes, indicating AMSH might also play a role in MVB/late endosomes. Expression of an AMSH mutant lacking CHMP3-binding ability resulted in aberrant endosomes with accumulations of ubiquitinated cargo. Nevertheless, CHMP3-binding capability was not essential for AMSH's in vitro DUB activity or its endosomal localization, suggesting that, in vivo, the deubiquitination of endosomal cargo is CHMP3-dependent. Ubiquitinated cargo also accumulated on endosomes when catalytically inactive AMSH was expressed or AMSH was depleted. These results suggest that both the DUB activity of AMSH and its CHMP3-binding ability are required to clear ubiquitinated cargo from endosomes.