Phosphoinositides are ubiquitous membrane components of various intracellular compartments, which regulate many diverse cellular functions including membrane trafficking events, secretion, actin cytoskeletal organization, cellular proliferation, and inhibition of apoptosis (reviewed in Refs. 1-4). Many of these functions are mediated by binding and recruiting signaling proteins which contain specific phosphoinositidebinding domains such as SH2 domains, pleckstrin homology domains, FYVE domains, C2 domains or polybasic domains, thereby localizing these effector proteins to specific membranes (reviewed in Refs. 3 and 4).Phosphatidylinositol (4,5)-bisphosphate (PtdIns(4,5)P 2 ) 1 serves as a precursor to second messenger molecules such as inositol (1,4,5)-trisphosphate and phosphatidylinositol (3,4,5)-trisphosphate, but also independent of further modification regulates the actin cytoskeleton and membrane trafficking (1, 5). PtdIns(4,5)P 2 binds to actin-binding proteins such as profilin and gelsolin (6) and displaces capping proteins from actin filaments, allowing polymerization and formation of actin stress fibers (7-9). PtdIns(4,5)P 2 also plays a role in regulating vesicle budding and in the recruitment and activation of proteins involved in the coating of vesicles (2).Cellular levels of PtdIns(4,5)P 2 are regulated by a series of lipid phosphorylation and dephosphorylation reactions mediated by specific lipid kinases and phosphatases. Inositol polyphosphate 5-phosphatases (5-phosphatases) regulate cellular PtdIns(4,5)P 2 levels by hydrolyzing the 5-position phosphate from the inositol ring forming phosphatidylinositol 4-phosphate (PtdIns(4)P) (10, 11). The budding yeast Saccharomyces cerevisiae has four 5-phosphatase genes, INP51, INP52, INP53, and INP54. Inp51p, Inp52p, and Inp53p each comprise an N-terminal SacI domain, a central 5-phosphatase domain, and a C-terminal proline-rich region (12, 13). These enzymes share significant sequence homology with the mammalian homologue synaptojanin, which regulates the recycling of synaptic vesicles in nerve terminals (14). Synaptojanin, Inp52p, and Inp53p contain two catalytic domains, a central 5-phosphatase domain and an N-terminal SacI domain which hydrolyzes PtdIns(3,5)P 2 , PtdIns(4)P, and PtdIns(3)P forming PtdIns (15). Null mutation of any two SacI domain-containing 5-phosphatases results in plasma membrane invaginations and thickened cell walls, defects in polarization of the actin cytoskeleton, and impaired endocytosis (12, 13). However, double SacI domain-containing 5-phosphatase null mutants display normal secretion of invertase suggesting that Inp51p, Inp52p, and Inp53p do not play a role in regulating secretion (16). A triple SacI domain-containing 5-phosphatase null mutant is nonviable suggesting Inp54p cannot function to rescue the loss of these three 5-phosphatases.