Inositol polyphosphate 5-phosphatases (5-phosphatase) hydrolyze the 5-position phosphate from the inositol ring of phosphatidylinositol-derived signaling molecules; however, the mechanism of catalysis is only partially characterized. These enzymes play critical roles in regulating cell growth, apoptosis, intracellular calcium oscillations, and post-synaptic vesicular trafficking. The UCLA fold recognition server (threader) predicted that the conserved 300-amino acid catalytic domain, common to all 5-phosphatases, adopts the fold of the apurinic/apyrimidinic (AP) base excision repair endonucleases. PSI-BLAST searches of GENPEPT, using the amino acid sequence of AP endonuclease exonuclease III, identified all members of the 5-phosphatase family with highly significant scores. A sequence alignment between exonuclease III and all known 5-phosphatases revealed six highly conserved motifs containing residues that corresponded to the catalytic residues in the AP endonucleases. Mutation of each of these residues to alanine in the mammalian 43-kDa, or yeast Inp52p 5-phosphatase, resulted in complete loss of enzyme activity. We predict the 5-phosphatase enzymes share a similar mechanism of catalysis to the AP endonucleases, consistent with other common functional similarities such as an absolute requirement for magnesium for activity. Based on this analysis, functional roles have been assigned to conserved residues in all 5-phosphatase enzymes.The phosphoinositide signaling cascade regulates many essential cellular processes including secretion, cellular proliferation, actin polymerization, vesicular and protein trafficking, cell growth, and inhibition of apoptosis (1-5). The inositol polyphosphate 5-phosphatases (5-phosphatases) 1 are a large family of enzymes that specifically hydrolyze the 5-position phosphate from the inositol ring from both inositol phosphates and phosphoinositides (5). Nine mammalian enzymes have been cloned and characterized, and four yeast homologues have been identified in Saccharomyces cerevisiae (6 -8).The 5-phosphatases play a significant role in the regulation of many phosphoinositide signaling events and in the pathogenesis of human diseases. Recent characterization of mice or humans lacking functional 5-phosphatase isoforms has identified the role specific 5-phosphatases play in regulating cell growth, post-synaptic vesicular trafficking, and apoptosis. The Src homology 2 domain containing 5-phosphatase SHIP is exclusively expressed in hematopoietic cells. Gene-targeted deletion of SHIP in mice leads to early death from a syndrome that resembles chronic myeloid leukemia (9). In primary cell lines derived from Philadelphia-positive chronic myeloid leukemia patients, the expression of SHIP is reduced or absent (10). The pre-synaptic 5-phosphatase synaptojanin associates with endocytic-coated intermediates and regulates synaptic vesicle recycling. Synaptojanin-deficient mice demonstrate neurological impairment and die shortly after birth (2). Lowe's oculocerebrorenal (OCRL) syndrome is a human...