Multiple mechanisms of dysregulation of receptor tyrosine kinases (RTKs) are observed in human cancers. In addition to gain-of-function, loss of negative regulation also contributes to oncogenic activation of RTKs. Negative regulation of many RTKs involves their internalization and degradation in the lysosome, a process regulated through ubiquitination. RTK oncoproteins activated following chromosomal translocation, are no longer transmembrane proteins, and are predicted to escape lysosomal degradation. To test this, we used the Tpr-Met oncogene, generated following chromosomal translocation of the hepatocyte growth factor receptor (Met). Unlike Met, Tpr-Met is localized in the cytoplasm and also lacks the binding site for Cbl ubiquitin ligases. We determined whether subcellular localization of Tpr-Met, and/or loss of its Cbl-binding site, is important for oncogenic activity. Presence of a Cbl-binding site and ubiquitination of cytosolic Tpr-Met oncoproteins does not alter their transforming activity. In contrast, plasma membrane targeting allows Tpr-Met to enter the endocytic pathway, and Tpr-Met transforming activity as well as protein stability are decreased in a Cbl-dependent manner. We show that transformation by Tpr-Met is in part dependent on its ability to escape normal downregulatory mechanisms. This provides a paradigm for many RTK oncoproteins activated following chromosomal translocation.