Although genetic and biochemical studies suggest a role for Eps15 homology domain containing proteins in clathrin-mediated endocytosis, the specific functions of these proteins have been elusive. Eps15 is found at the growing edges of clathrin-coated pits, leading to the hypothesis that it participates in the formation of coated vesicles. We have evaluated this hypothesis by examining the effect of Eps15 on clathrin assembly. We found that although Eps15 has no intrinsic ability to assemble clathrin, it potently stimulates the ability of the clathrin adaptor protein, AP180, to assemble clathrin at physiological pH. We have also defined the binding sites for Eps15 on squid AP180. These sites contain an NPF motif, and peptides derived from these binding sites inhibit the ability of Eps15 to stimulate clathrin assembly in vitro. Furthermore, when injected into squid giant presynaptic nerve terminals, these peptides inhibit the formation of clathrin-coated pits and coated vesicles during synaptic vesicle endocytosis. This is consistent with the hypothesis that Eps15 regulates clathrin coat assembly in vivo, and indicates that interactions between Eps15 homology domains and NPF motifs are involved in clathrin-coated vesicle formation during synaptic vesicle recycling.