Immune responses are initiated when molecules of microbial origin are sensed by the Toll‐like receptors (TLRs). We now report the identification of essential molecular components for the trafficking of the lipopolysaccharide (LPS) receptor complex. LPS was endocytosed by a receptor‐mediated mechanism dependent on dynamin and clathrin and colocalized with TLR4 on early/sorting endosomes. TLR4 was ubiquitinated and associated with the ubiquitin‐binding endosomal sorting protein hepatocyte growth factor‐regulated tyrosine kinase substrate, Hrs. Inhibition of endocytosis and endosomal sorting increased LPS signaling. Finally, the LPS receptor complex was sorted to late endosomes/lysosomes for degradation and loading of associated antigens onto HLA class II molecules for presentation to CD4⁺ T cells. Our results show that endosomal trafficking of the LPS receptor complex is essential for signal termination and LPS‐associated antigen presentation, thus controlling both innate and adaptive immunity through TLR4.