Complement promotes vascular inflammation in transplant organ rejection and connective tissue diseases. Here we identify ZFYVE21 as a complement-induced Rab5 effector that induces non-canonical NF-κB in endothelial cells (EC). In response to membrane attack complexes (MAC), ZFYVE21 is post-translationally stabilized on MAC+Rab5+ endosomes in a Rab5- and PI(3)P-dependent manner. ZFYVE21 promotes SMURF2-mediated polyubiquitinylation and proteasome-dependent degradation of endosome-associated PTEN to induce vesicular enrichment of PI(3,4,5)P3 and sequential recruitment of activated Akt and NF-κB-inducing kinase (NIK). Pharmacologic alteration of cellular phosphoinositide content with miltefosine reduces ZFYVE21 induction, EC activation, and allograft vasculopathy in a humanized mouse model. ZFYVE21 induction distinctly occurs in response to MAC and is detected in human renal and synovial tissues. Our data identifies ZFYVE21 as a Rab5 effector, defines a Rab5-ZFYVE21-SMURF2-pAkt axis by which it mediates EC activation, and demonstrates a role for this pathway in complement-mediated conditions.