The recent identification of several novel endocytic compartments has challenged our current understanding of the topological and functional organization of the endocytic pathway. Using quantitative single vesicle imaging and acute manipulation of phosphoinositides we show that APPL endosomes, which participate in growth factor receptor trafficking and signaling, represent an early endocytic intermediate common to a subset of clathrin derived endocytic vesicles and macropinosomes. Most APPL endosomes are precursors of classical PI3P positive endosomes, and PI3P plays a critical role in promoting this conversion. Depletion of PI3P causes a striking reversion of Rab5 positive endosomes to the APPL stage, and results in enhanced growth factor signaling. These findings reveal a surprising plasticity of the early endocytic pathway. Importantly, PI3P functions as a switch to dynamically regulate maturation and signaling of APPL endosomes.