Involved in late steps of the endosomal multivesicular bodies (MVB) pathway. Recognizes membrane-associated ESCRT-III assemblies and catalyzes their disassembly, possibly in combination with membrane fission. Redistributes the ESCRT-III components to the cytoplasm for further rounds of MVB sorting. MVBs contain intraluminal vesicles (ILVs) that are generated by invagination and scission from the limiting membrane of the endosome and mostly are delivered to lysosomes enabling degradation of membrane proteins, such as stimulated growth factor receptors, lysosomal enzymes and lipids. Involved in cytokinesis: retained at the midbody by ZFYVE19/ANCHR and CHMP4C until abscission checkpoint signaling is terminated at late cytokinesis. It is then released following dephosphorylation of CHMP4C, leading to abscission (PubMed:24814515). VPS4A/B are required for the exosomal release of SDCBP, CD63 and syndecan (PubMed:22660413).

(Microbial infection) In conjunction with the ESCRT machinery also appears to function in topologically equivalent membrane fission events, such as the terminal stages of cytokinesis and enveloped virus budding (HIV-1 and other lentiviruses).