VE-cadherin is an endothelial-specific cadherin that plays important roles in vascular morphogenesis and growth control. To investigate the mechanisms by which endothelial cells regulate cadherin cell surface levels, a VE-cadherin mutant containing the non-adhesive interleukin-2 (IL-2) receptor extracellular domain and the VE-cadherin cytoplasmic tail (IL-2R-VE-cadcyto) was expressed in microvascular endothelial cells. Expression of the IL-2R-VE-cadcyto mutant resulted in the internalization of endogenous VE-cadherin and in a dramatic decrease in endogenous VE-cadherin levels. The internalized VE-cadherin co-localized with early endosomes, and the lysosomal inhibitor chloroquine dramatically inhibited the down-regulation of VE-cadherin in cells expressing the IL-2R-VE-cadcyto mutant. Chloroquine treatment also resulted in the accumulation of a VE-cadherin fragment lacking the beta-catenin binding domain of the VE-cadherin cytoplasmic tail. The formation of the VE-cadherin fragment could be prevented by treating endothelial cells with proteasome inhibitors. Furthermore, inhibition of the proteasome prevented VE-cadherin internalization and inhibited the disruption of endothelial intercellular junctions by the IL-2RVE-cadcyto mutant. These results provide new insights into the mechanisms of VE-cadherin processing and degradation in microvascular endothelial cells.