LGR5, a seven-transmembrane domain receptor of the rhodopsin family, is a Wnt target gene and a bona fide marker of adult stem cells in the gastrointestinal tract and hair follicle bulge. Recently, we and others demonstrated that LGR5 and its homologues function as receptors of the R-spondin family of stem cell factors to potentiate Wnt/β-catenin signaling. However, the mechanism of how LGR5 enhances the signaling output remains unclear. Here we report that following costimulation with the ligands R-spondin1 and Wnt3a, LGR5 interacts and forms a supercomplex with the Wnt coreceptors LRP6 and Fzd5 which is rapidly internalized and then degraded. Internalization of LGR5 is mediated through a dynamin- and clathrin-dependent pathway. Inhibition of this endocytic process has no effect on LGR5 signaling. Deletion of the C-terminal tail of LGR5 maintains its ability to interact with LRP6, yet this LGR5 mutant exhibits increased signaling activity and a decreased rate of endocytosis in response to R-spondin1 compared to the wild-type receptor. This study provides direct evidence that LGR5 becomes part of the Wnt signaling complex at the membrane level to enhance Wnt/β-catenin signaling. However, internalization of LGR5 does not appear to be essential for potentiating the canonical Wnt signaling pathway.