Phosphoinositides are involved in endocytosis in both mammalian cells and the amoeba Dictyostelium discoideum. Dd5P4 is the Dictyostelium homolog of human OCRL (oculocerebrorenal syndrome of Lowe); both have a RhoGAP domain and a 5-phosphatase domain that acts on phosphatidylinositol 4,5-bisphosphate/phosphatidylinositol 3,4,5-trisphosphate (PI(3,4,5)P 3 ). Inactivation of Dd5P4 inhibits growth on liquid medium and on bacteria. Dd5p4-null cells are impaired in phagocytosis of yeast cells. In wild-type cells, PI(3,4,5)P 3 is formed and converted to PI(3,4)P 2 just before closure of the phagocytic cup. In dd5p4-null cells, a phagocytic cup is formed upon contact with the yeast cell, and PI(3,4,5)P 3 is still produced, but the phagocytic cup does not close. We suggest that Dd5P4 regulates the conversion of PI(3,4,5)P 3 to PI(3,4)P 2 and that this conversion is essential for closure of the phagocytic cup. Phylogenetic analysis of OCRL-like 5-phosphatases with RhoGAP domains reveal that D. discoideum Dd5P4 is a surprisingly close homolog of human OCRL, the protein responsible for Lowe syndrome. We expressed human OCRL in dd5p4-null cells. Growth on bacteria and axenic medium is largely restored, whereas the rate of phagocytosis of yeast cells is partly restored, indicating that human OCRL can functionally replace Dictyostelium Dd5P4.