After endocytosis, transmembrane cargoes such as signaling receptors, channels, and transporters enter endosomes where they are sorted to different destinations. Retromer and ESCRT (endosomal sorting complex required for transport) are functionally distinct protein complexes on endosomes that direct cargo sorting into the recycling retrograde transport pathway and the degradative multivesicular endosome pathway (MVE), respectively. Cargoes destined for degradation in lysosomes are decorated with K63-linked ubiquitin chains, which serve as an efficient sorting signal for entry into the MVE pathway. Defects in K63-linked ubiquitination disrupt MVE sorting and degradation of membrane proteins. Here, we unexpectedly found that UBC-13, the E2 ubiquitin-conjugating enzyme that generates K63-linked ubiquitin chains, is essential for retrograde transport of multiple retromer-dependent cargoes including MIG-14/Wntless. Loss of ubc-13 disrupts MIG-14/Wntless trafficking from endosomes to the Golgi, causing missorting of MIG-14 to lysosomes and impairment of Wnt-dependent processes. We observed that retromer-associated SNX-1 and the ESCRT-0 subunit HGRS-1/Hrs localized to distinct regions on a common endosome in wild type but overlapped on ubc-13(lf) endosomes, indicating that UBC-13 is important for the separation of retromer and ESCRT microdomains on endosomes. Our data suggest that cargo ubiquitination mediated by UBC-13 plays an important role in maintaining the functionally distinct subdomains to ensure efficient cargo segregation on endosomes.