Essential role in endosome membrane invagination and formation of multivesicular bodies, MVBs. Required during gastrulation and appears to regulate early embryonic signaling pathways. Inhibits tyrosine kinase receptor signaling by promoting degradation of the tyrosine-phosphorylated, active receptor, potentially by sorting activated receptors into MVBs. The MVBs are then trafficked to the lysosome where their contents are degraded. Homodimer; in vitro. Interacts with ubiquitin. Locates to vesicles present in the perinuclear regions of muscle cells and in the periphery of Garland cells of third-instar larvae. Expressed both maternally and zygotically throughout development.