β-arrestins critically regulate G protein-coupled receptor (GPCR) signaling, not only 'arresting' the G protein signal but also modulating endocytosis and initiating a discrete G protein-independent signal via MAP kinase1–3. Despite enormous recent progress toward understanding biophysical aspects of arrestin function4,5, its cell biology remains relatively poorly understood. Two key tenets underlie the present dogma: (1) β-arrestin accumulates in clathrin-coated structures (CCSs) exclusively in physical complex with its activating GPCR, and (2) MAP kinase activation requires endocytosis of formed GPCR - β-arrestin complexes6–9. We show here, using β1-adrenergic receptors, that β-arrestin-2 (Arrestin 3) accumulates robustly in CCSs after dissociating from its activating GPCR and transduces the MAP kinase signal from CCSs. Moreover, inhibiting subsequent endocytosis of CCSs enhances the clathrin and β-arrestin -dependent MAP kinase signal. These results demonstrate β-arrestin 'activation at a distance', after dissociating from its activating GPCR, and signaling from CCSs. We propose a β-arrestin signaling cycle that is catalytically activated by the GPCR and energetically coupled to the endocytic machinery.