The low-density lipoprotein receptor (LDLR) is a critical determinant of plasma cholesterol levels that internalizes lipoprotein cargo via clathrin-mediated endocytosis. Here, we show that the E3 ubiquitin ligase IDOL stimulates a previously unrecognized, clathrin-independent pathway for LDLR internalization. Real-time single-particle tracking and electron microscopy reveal that IDOL is recruited to the plasma membrane by LDLR, promotes LDLR internalization in the absence of clathrin or caveolae, and facilitates LDLR degradation by shuttling it into the multivesicular body (MVB) protein-sorting pathway. The IDOL-dependent degradation pathway is distinct from that mediated by PCSK9 as only IDOL employs ESCRT (endosomal-sorting complex required for transport) complexes to recognize and traffic LDLR to lysosomes. Small interfering RNA (siRNA)-mediated knockdown of ESCRT-0 (HGS) or ESCRT-I (TSG101) components prevents IDOL-mediated LDLR degradation. We further show that USP8 acts downstream of IDOL to deubiquitinate LDLR and that USP8 is required for LDLR entry into the MVB pathway. These results provide key mechanistic insights into an evolutionarily conserved pathway for the control of lipoprotein receptor expression and cellular lipid uptake.