Phosphoinositides have emerged as key regulators of membrane traffic through their control of the localization and activity of several effector proteins. Both Rab5 and phosphatidylinositol (4,5)-bisphosphate [PtdIns(4,5)P2] are involved in the early steps of the clathrin-dependent endocytic pathway, but little is known about how their functions are coordinated. We have studied the role of PtdIns(4,5)P2 and Rab5 in the Drosophila germline during oogenesis. We found that Rab5 is required for the maturation of early endocytic vesicles. We show that PtdIns(4,5)P2 is required for endocytic-vesicle formation, for Rab5 recruitment to endosomes and, consistently, for endocytosis. Furthermore, we reveal a previously undescribed role of Rab5 in releasing PtdIns(4,5)P2, PtdIns(4,5)P2-binding budding factors and F-actin from early endocytic vesicles. Finally, we show that overexpressing the PtdIns(4,5)P2-synthesizing enzyme Skittles leads to an endocytic defect that is similar to that seen in rab5 loss-of-function mutants. Hence, our results argue strongly in favor of the hypothesis that the Rab5-dependant release of PtdIns(4,5)P2 from endosomes that we discovered in this study is crucial for endocytosis to proceed.