The effects of agents that inhibit receptor-mediated endocytosis on type I (slow or high-affinity) and type II (fast or low-affinity) NGF binding have been examined in rat PC12 cells. Compounds interfering with endocytosis eliminate type I NGF binding; those interfering with acidification of endosomal vesicles cause increased type I binding at the expense of type II binding. Measurement of NGF binding during and after treatment with inhibitors indicates that NGF receptors rapidly cycle from the cell surface into an undefined endocytotic compartment and back to the surface with little degradation of receptor or NGF, consistent with a model in which NGF receptors are rapidly and reversibly endocytosed or sequestered; those receptors free on the surface represent type II NGF receptors, while those in the process of endocytosis represent type I NGF receptors. The type I and type II NGF receptor species can be interconverted by agents that can manipulate the position of the receptor in the internalization cycle.