The molecular regulation of the recruitment of initial signaling complexes at the TNF-R1 is poorly defined. We demonstrate here that within minutes internalized TNF-R1 (TNF receptosomes) recruits TRADD, FADD, and caspase-8 to establish the "death-inducing signaling complex" (DISC). In addition, we identified the TNF-R1 internalization domain (TRID) required for receptor endocytosis and provide evidence that TNF-R1 internalization, DISC formation, and apoptosis are inseparable events. Analyzing cell lines expressing an internalization-deficient receptor (TNF-R1 DeltaTRID) revealed that recruitment of RIP-1 and TRAF-2 to TNF-R1 occurred at the level of the plasma membrane. In contrast, aggregation of TRADD, FADD, and caspase-8 to establish the TNF-R1-associated DISC is critically dependent on receptor endocytosis. Furthermore, fusion of TNF receptosomes with trans-Golgi vesicles results in activation of acid sphingomyelinase and cathepsin D. Thus, TNF receptosomes establish the different TNF signaling pathways by compartmentalization of plasma membrane-derived endocytic vesicles harboring the TNF-R1-associated DISC.