His Domain Protein Tyrosine Phosphatase (HD-PTP) collaborates with Endosomal Sorting Complexes Required for Transport (ESCRTs) to sort endosomal cargo into intralumenal vesicles, forming the multivesicular body. Completion of multivesicular body sorting is accompanied by maturation of the endosome into a late endosome, an event that requires inactivation of the early endosomal GTPase, Rab5. Here we show that HD-PTP links ESCRT function with endosomal maturation. HD-PTP depletion prevents multivesicular body sorting, whilst also blocking cargo from exiting Rab5-rich endosomes. HD-PTP depleted cells contain hyperphosphorylated Rabaptin-5, a cofactor for the Rab5 guanine nucleotide exchange factor, Rabex-5, though HD-PTP is unlikely to directly dephosphorylate Rabaptin-5. In addition, HD-PTP depleted cells exhibit Rabaptin-5 dependent hyperactivation of Rab5. HD-PTP binds directly to Rabaptin-5, between its Rabex-5 and Rab5 binding domains. This binding reaction involves the ESCRT-0/ESCRT-III binding site in HD-PTP and is competed by an ESCRT-III peptide. Jointly, these findings indicate that HDPTP may alternately scaffold ESCRTs and modulate Rabex-5/Rabaptin-5 activity, thereby helping to coordinate the completion of MVB sorting with endosomal maturation.