All receptor tyrosine kinases (RTKs) activate similar downstream signaling pathways through a common set of effectors, yet it is not fully understood how different receptors elicit distinct cellular responses to cause cell proliferation, differentiation, or other cell fates. We tested the hypothesis that regulation of SRC family kinase (SFK) signaling by the scaffold protein, PAG1, influences cell fate decisions following RTK activation. We generated a neuroblastoma cell line expressing a PAG1 fragment that lacks the membrane-spanning domain (PAG1TM-) and localized to the cytoplasm. PAG1TM- cells exhibited higher amounts of active SFKs and increased growth rate. PAG1TM- cells were unresponsive to TRKA and RET signaling, two RTKs that induce neuronal differentiation, but retained responses to EGFR and KIT. Under differentiation conditions, PAG1TM- cells continued to proliferate and did not extend neurites or increase β-III tubulin expression. FYN and LYN were sequestered in multivesicular bodies (MVBs), and dramatically more FYN and LYN were in the lumen of MVBs in PAG1TM- cells. In particular, activated FYN was sequestered in PAG1TM- cells, suggesting that disruption of FYN localization led to the observed defects in differentiation. The results demonstrate that PAG1 directs SFK intracellular localization to control activity and to mediate signaling by RTKs that induce neuronal differentiation.