SARA and endofin are endosomal adaptor proteins that drive Smad phosphorylation by ligand-activated TGFβ/BMP receptors. We show in this study that SARA and endofin also recruit the tumour supressor HD-PTP, a master regulator of endosomal sorting and ESCRT-dependent receptor down-regulation. High affinity interactions occur between the SARA/endofin N-termini, and the conserved hydrophobic region in the HD-PTP Bro1 domain that binds CHMP4/ESCRT-III. CHMP4 engagement is a universal feature of Bro1 proteins, but SARA/endofin binding is specific to HD-PTP. Crystallographic structures of HD-PTPBro1 in complex with SARA, endofin and three CHMP4 isoforms
revealed that all ligands bind similarly to the conserved site, but critically, only
SARA/endofin interact at a neighbouring pocket unique to HD-PTP. The structures, together with mutagenesis and binding analysis, explain the high affinity and specific binding of SARA/endofin, and why they compete so effectively with CHMP4. Our data invoke models for how endocytic regulation of TGFβ/BMP signalling is controlled.