His domain protein tyrosine phosphatase (HD-PTP; also known as PTPN23) collaborates with endosomal sorting complexes required for transport (ESCRTs) to sort endosomal cargo into intralumenal vesicles, forming the multivesicular body (MVB). Completion of MVB sorting is accompanied by maturation of the endosome into a late endosome, an event that requires inactivation of the early endosomal GTPase Rab5 (herein referring to generically to all isoforms). Here, we show that HD-PTP links ESCRT function with endosomal maturation. HD-PTP depletion prevents MVB sorting, while also blocking cargo from exiting Rab5-rich endosomes. HD-PTP-depleted cells contain hyperphosphorylated Rabaptin-5 (also known as RABEP1), a cofactor for the Rab5 guanine nucleotide exchange factor Rabex-5 (also known as RABGEF1), although HD-PTP is unlikely to directly dephosphorylate Rabaptin-5. In addition, HD-PTP-depleted cells exhibit Rabaptin-5-dependent hyperactivation of Rab5. HD-PTP binds directly to Rabaptin-5, between its Rabex-5- and Rab5-binding domains. This binding reaction involves the ESCRT-0/ESCRT-III binding site in HD-PTP, which is competed for by an ESCRT-III peptide. Jointly, these findings indicate that HD-PTP may alternatively scaffold ESCRTs and modulate Rabex-5-Rabaptin-5 activity, thereby helping to coordinate the completion of MVB sorting with endosomal maturation.