Glial cell-line-derived neurotrophic factor (GDNF) is a potent neurotrophic factor that has reached clinical trials for Parkinson's disease. GDNF binds to its coreceptor GFRα1 and signals through the transmembrane receptor tyrosine kinase RET, or RET independently through NCAM or syndecan-3. Whereas the GDNF signaling cascades are well described, cellular turnover and trafficking of GDNF and its receptors remain poorly characterized. Here, we find that SorLA acts as sorting receptor for the GDNF/GFRα1 complex, directing it from the cell surface to endosomes. Through this mechanism, GDNF is targeted to lysosomes and degraded while GFRα1 recycles, creating an efficient GDNF clearance pathway. The SorLA/GFRα1 complex further targets RET for endocytosis but not for degradation, affecting GDNF-induced neurotrophic activities. SorLA-deficient mice display elevated GDNF levels, altered dopaminergic function, marked hyperactivity, and reduced anxiety, all of which are phenotypes related to abnormal GDNF activity. Taken together, these findings establish SorLA as a critical regulator of GDNF activity in the CNS.