Class I PI 3-kinase (PI3K) signaling is central to animal growth and metabolism, and disruption of this pathway occurs frequently in cancer and diabetes. However, the specific spatial/temporal dynamics and signaling roles of its minor lipid messenger, phosphatidylinositol (3,4)bisphosphate [PI(3,4)P2], are not well understood. This owes principally to a lack of tools to study this scarce lipid. Here, we developed a high sensitivity genetically encoded biosensor for PI(3,4)P2, demonstrating high selectivity and specificity of the sensor for the lipid. We show that despite clear evidence for class II PI3K in PI(3,4)P2-driven function, the overwhelming majority of the lipid accumulates through degradation of class I PI3K-produced PIP3. However, we show that PI(3,4)P2 is also subject to hydrolysis by the tumor suppressor lipid phosphatase PTEN.Collectively, our results show that PI(3,4)P2 is potentially an important driver of class I PI3Kdriven signaling, and provides powerful new tools to begin to resolve the biological functions of this lipid downstream of class I and II PI3K.