SummaryThe mechanisms controlling the steady-state cell surface levels of cytokine receptors, and consequently the cellular response to cytokines, remain poorly understood. The number of surface-exposed receptors is a dynamic balance of de novo synthesis, transport to the plasma membrane, internalization, recycling, degradation and ectodomain shedding. We previously reported that the E3 ubiquitin ligase RING finger protein 41 (RNF41) inhibits basal lysosomal degradation and enhances ectodomain shedding of JAK2-associated cytokine receptors. Ubiquitin-specific protease 8 (USP8), an RNF41-interacting deubiquitylating enzyme (DUB) stabilizes RNF41 and is involved in trafficking of various transmembrane proteins. The present study identifies USP8 as a substrate of RNF41 and reveals that loss of USP8 explains the aforementioned RNF41 effects. RNF41 redistributes and ubiquitylates USP8, and reduces USP8 levels. In addition, USP8 knockdown functionally matches the effects of RNF41 ectopic expression on the model leptin and leukemia inhibitory factor (LIF) receptors. Moreover, RNF41 indirectly destabilizes the ESCRT-0 complex through suppression of USP8. Collectively, our findings demonstrate that RNF41 controls JAK2-associated cytokine receptor trafficking by acting as a key regulator of USP8 and ESCRT-0 stability. Balanced reciprocal cross-regulation of RNF41 and USP8 thus determines whether receptors are sorted for lysosomal degradation or recycling, this way regulating basal cytokine receptor levels.