Allelic exclusion of variant surface glycoprotein (VSG) genes is essential for African trypanosomes to evade the host antibody response by antigenic variation. The mechanisms by which this parasite expresses only one of its ∼2,000 VSG genes at a time are unknown. We show that nuclear phosphatidylinositol 5-phosphatase (PIP5Pase) interacts with repressor activator protein 1 (RAP1) in a multiprotein complex and functions in the control of VSG allelic exclusion. RAP1 binds PIP5Pase substrate phosphatidylinositol 3,4,5-trisphosphate [PI(3,4,5)P3], and catalytic mutation of PIP5Pase that inhibits PI(3,4,5)P3 dephosphorylation results in simultaneous transcription of VSGs from all telomeric expression sites (ESs) and from silent subtelomeric VSG arrays. PIP5Pase and RAP1 bind to telomeric ESs, especially at 70-bp repeats and telomeres, and their binding is altered by PIP5Pase inactivation or knockdown, implying changes in ES chromatin organization. Our data suggest a model whereby PIP5Pase controls PI(3,4,5)P3 binding by RAP1 and, thus, RAP1 silencing of telomeric and subtelomeric VSG genes. Hence, allelic exclusion of VSG genes may entail control of nuclear phosphoinositides.