The low density lipoprotein (LDL) receptor plays a pivotal role in cholesterol metabolism. Inherited mutations that disturb the activity of the receptor lead to elevations in plasma cholesterol levels and early-onset coronary atherosclerosis. Defects in either the LDL receptor or apolipoprotein B, the proteinaceous component of LDL particles that binds the LDL receptor, elevate circulating LDL-cholesterol levels in an autosomal-dominant fashion, with heterozygotes displaying values between homozygous and normal individuals. Rarely, similar clinical phenotypes occur with a recessive pattern of inheritance, and several genetic lesions in the autosomal recessive hypercholesterolemia (ARH) gene on chromosome 1 have been mapped in this class of patients. ARH has an N-terminal phosphotyrosine-binding (PTB) domain evolutionarily related to that found in Disabled-2 and numb, two endocytic proteins. PTB domains bind to the consensus sequence FXNPXY, corresponding to the internalization motif of the LDL receptor. We show here that in addition to the FXNPXY sequence, ARH binds directly to soluble clathrin trimers and to clathrin adaptors by a mode involving the independently folded appendage domain of the beta subunit. At steady state, ARH colocalizes with endocytic proteins in HeLa cells, and the LDL receptor fluxes through peripheral ARH-positive sites before delivery to early endosomes. Because ARH also binds directly to phosphoinositides, which regulate clathrin bud assembly at the cell surface, our data suggest that in ARH patients, defective sorting adaptor function in hepatocytes leads to faulty LDL receptor traffic and hypercholesterolemia.