Arrestin domain-containing protein 3 (ARRDC3) is a member of the mammalian α-arrestin family, which is predicted to share similar tertiary structure with visual-/β-arrestins and also contains C-terminal PPXY motifs that mediate interaction with E3 ubiquitin ligases. Recently, ARRDC3 has been proposed to play a role in regulating the trafficking of G protein-coupled receptors, although mechanistic insight into this process is lacking. Here, we focused on characterizing the role of ARRDC3 in regulating the trafficking of the β2-adrenergic receptor (β2AR). We find that ARRDC3 primarily localizes to EEA1-positive early endosomes and directly interacts with the β2AR in a ligand-independent manner. Although ARRDC3 has no effect on β2AR endocytosis or degradation, it negatively regulates β2AR entry into SNX27-occupied endosomal tubules. This results in delayed recycling of the receptor and a concomitant increase in β2AR-dependent endosomal signaling. Thus, ARRDC3 functions as a switch to modulate the endosomal residence time and subsequent intracellular signaling of the β2AR.