G protein-coupled receptors (GPCRs) regulate many pathophysiological processes and are major therapeutic targets. The impact of disease on the subcellular distribution and function of GPCRs is poorly understood. We investigated trafficking and signaling of protease-activated receptor 2 (PAR₂) in colitis. To localize PAR₂ and assess redistribution during disease, we generated knockin mice expressing PAR₂ fused to monomeric ultrastable green fluorescent protein (muGFP). PAR₂-muGFP signaled and trafficked normally. PAR₂ messenger RNA was detected at similar levels in Par₂-mugfp and wild-type mice. Immunostaining with a GFP antibody and RNAScope in situ hybridization using F2rl1 (PAR₂) and Gfp probes revealed that PAR₂-muGFP was expressed in epithelial cells of the small and large intestine and in subsets of enteric and dorsal root ganglia neurons. In healthy mice, PAR₂-muGFP was prominently localized to the basolateral membrane of colonocytes. In mice with colitis, PAR₂-muGFP was depleted from the plasma membrane of colonocytes and redistributed to early endosomes, consistent with generation of proinflammatory proteases that activate PAR₂ PAR₂ agonists stimulated endocytosis of PAR₂ and recruitment of Gα_q, Gα_i, and β-arrestin to early endosomes of T84 colon carcinoma cells. PAR₂ agonists increased paracellular permeability of colonic epithelial cells, induced colonic inflammation and hyperalgesia in mice, and stimulated proinflammatory cytokine release from segments of human colon. Knockdown of dynamin-2 (Dnm2), the major colonocyte isoform, and Dnm inhibition attenuated PAR₂ endocytosis, signaling complex assembly and colonic inflammation and hyperalgesia. Thus, PAR₂ endocytosis sustains protease-evoked inflammation and nociception and PAR₂ in endosomes is a potential therapeutic target for colitis.