Trafficking of ligand-gated ion channels to lysosomes is generally thought of as an end-point for the receptor as lysosomes are cellular sites of degradation. We provide evidence that an ATP gated ion channel, the P2X4 receptor, is contained predominantly within lysosomes in freshly isolated mouse peritoneal macrophages. Lysosomal targeting was mediated by tyrosine and dileucine based motifs, and the receptor was protected from degradation by N-glycosylation. Upon stimulation of phagocytosis, P2X4 receptors were delivered to the phagosome membrane. To test the functionality of P2X4 receptors trafficked from lysosomes, we triggered lysosome exocytosis and measured ATP-evoked whole cell currents. Ivermectin-sensitive, P2X4-mediated currents increased ~5-fold following lysosome exocytosis and this increase was independent of delivery of newly synthesised receptors to the plasma membrane. Our results suggest that the targeting of P2X4 receptors to lysosomes ensures their low surface expression in unstimulated macrophages whilst providing a pool of receptors for rapidly up-regulating their expression at the phagosome and plasma membrane.