Insulin-degrading enzyme (IDE) hydrolyzes bioactive peptides, including insulin, amylin, and the amyloid β peptides. Polyanions activate IDE toward some substrates, yet an endogenous polyanion activator has not yet been identified. Here we report that inositol phosphates (InsPs) and phosphatdidylinositol phosphates (PtdInsPs) serve as activators of IDE. InsPs and PtdInsPs interact with the polyanion-binding site located on an inner chamber wall of the enzyme. InsPs activate IDE by up to ∼95-fold, affecting primarily V max . The extent of activation and binding affinity correlate with the number of phosphate groups on the inositol ring, with phosphate positional effects observed. IDE binds PtdInsPs from solution, immobilized on membranes, or presented in liposomes. Interaction with PtdInsPs, likely PtdIns(3)P, plays a role in localizing IDE to endosomes, where the enzyme reportedly encounters physiological substrates. Thus, InsPs and PtdInsPs can serve as endogenous modulators of IDE activity, as well as regulators of its intracellular spatial distribution.insulin-degrading enzyme | inositols | phosphatidylinositols | activation | subcellular localization I nsulin-degrading enzyme (IDE), also known as insulysin (EC 3.4.24.56), hydrolyzes a broad range of bioactive peptides in vitro, including angiotensin, glucagon, β-endorphin, amylin, and amyloid β peptides (Aβ), with the two most established in vivo substrates being insulin and Aβ. Evidence supporting a role for IDE in degrading insulin and Aβ in vivo includes associations of IDE gene variants with type 2 diabetes (1, 2) and Alzheimer's disease (3, 4), decreased clearance of the two peptides in IDE-deficient mice (5, 6), and antidiabetic activity produced by IDE inhibitors (7, 8), although some reports have questioned its role in insulin degradation (9, 10). In addition, IDE has been reported to have noncatalytic functions, such as acting as a receptor for varicella-zoster virus (11) and serving as a heat shock protein in stressed cells (12). IDE also modulates the activity of the proteasome (13), reportedly in conjunction with the retinoblastoma tumor-suppressor protein (14).We previously established that polyanions, such as free ATP and triphosphate, increase IDE activity by up to 100-fold toward a synthetic peptide substrate (15) and that ATP binds to a strongly electropositive inner surface of IDE that forms one-half of the substrate-binding chamber (16,17). Significantly, mutations in IDE that reduce its activation by polyanions also decrease its ability to rescue production of a mature yeast mating factor, indicating that activation by polyanions plays an important physiological role in cells (16). Physiological polyanionic activators of IDE have not yet been identified, however.Inositol phosphates (InsPs) are important intracellular second messengers generated by activation of many cell surface receptors (18,19). Phosphatidylinositol phosphates (PtdInsPs; phosphoinositides) participate in signaling and help define the identity of subcellular compartment...