The amyloid-β (Aβ) peptide, produced from amyloid precursor protein (APP) by β and γ-secretases, has been implicated in the etiology of Alzheimer's disease (AD). However, the precise intracellular trafficking pathway of APP and its subcellular locations to produce Aβ have remained unclear. To address these issues, we established fly AD models that recapitulated multiple AD-like symptoms by expressing human APP in the Drosophila nerve system. The ESCRT (endosomal sorting complexes required for transport) machinery regulates the sorting and trafficking of endocytosed proteins, yet its role in AD pathogenesis has not been explored in vivo. We found that knockdown of distinct ESCRT components ameliorated APP-induced morphological and behavioral defects, including impaired wing expansion, eye degeneration, dopamine neuron loss, locomotor disability, lifespan shortening, and cognitive deficits. Mechanistically, we showed that impaired ESCRT impeded APP's intracellular transportation from early endosomes to late endosomes, resulting in reduced Aβ production and amyloid deposit load. These data suggest that APP undergoes ESCRT-mediated endocytic trafficking, and Aβ is generated mainly in late endosomes. Our data provide the first in vivo evidence to support a physiological role of ESCRT in AD pathogenesis, suggesting that interfering with ESCRT machinery might be an alternative therapeutic strategy for AD.