CXCR7 is a receptor for chemokines including CXCL12 (SDF-1), a molecule that promotes tumor growth and metastasis in breast cancer and other malignancies. Building upon the recent observation that CXCR7 sequesters CXCL12, we investigated mechanisms for CXCR7-dependent uptake of chemokines. Breast cancer cells expressing CXCR7 accumulated chemokines CXCL12 and CXC11 present at concentrations < 1 ng/ml, unlike cells expressing CXCR4. CXCR7-dependent accumulation of chemokines was reduced by inhibitors of clathrin-mediated endocytosis. Following CXCR7-mediated internalization, CXCL12 trafficked to lysosomes and was degraded, although levels of CXCR7 remained stable. CXCR7 reduced CXCL12 in the extracellular space, limiting amounts of chemokine available to acutely stimulate signaling through CXCR4. CXCR7 constitutively internalized and recycled to the cell membrane even in the absence of ligand, and addition of chemokines did not significantly enhance receptor internalization. Chemokines at concentrations less than the Kd for ligand-receptor binding did not alter levels of CXCR7 at the cell surface. Higher concentrations of chemokine ligands reduced total cell surface expression of CXCR7 without affecting receptor internalization, indicating that receptor recycling was inhibited. CXCR7-dependent uptake of chemokines and receptor trafficking were regulated by β-arrestin 2. These studies establish mechanisms through which CXCR7 regulates availability of chemokine ligands in the extracellular space.