Class E vacuolar protein-sorting (Vps) proteins were first described in yeast as being involved in receptor-mediated endocytosis and multivesicular body formation. Inactivation by RNA interference of the class E VPS genes of the nematode Caenorhabditis elegans revealed heterogeneous phenotypes. We have further characterized the role of the essential gene Cevps-27, ortholog of human hepatocyte growth factor-regulated tyrosine kinase substrate, during the development of C. elegans. Use of green fluorescent protein fusion constructs and antibody staining revealed that Cevps-27 localizes to endosomal membranes. It is widely expressed but enriched in epithelial cells. Cevps-27 mutants presented enlarged endosomal structures and an accumulation of autophagic vesicles as revealed by electron microscopy and the analysis of the autophagic marker LGG-1. Cevps-27 animals arrested at L2-L3 molt with an inability to degrade their old cuticle. This molting phenotype was more severe when Cevps-27 worms were grown on suboptimal concentrations of cholesterol. Furthermore, defective endocytic trafficking of the low-density lipoprotein receptor-related protein 1 (LRP-1) was also observed in Cevps-27 mutants. These results indicate that CeVPS-27 is required for endosomal and autophagic pathways in C. elegans and plays a crucial role in the control of molting through LRP-1 internalization and cholesterol traffic.