The lipid second messenger phosphatidylinositol 3-phosphate [PI(3)P] plays a crucial role in intracellular membrane trafficking. We report here that myotubularin, a protein tyrosine phosphatase required for muscle cell differentiation, is a potent PI(3)P phosphatase. Recombinant human myotubularin specifically dephosphorylates PI(3)P in vitro. Overexpression of a catalytically inactive substrate-trapping myotubularin mutant (C375S) in human 293 cells increases PI(3)P levels relative to that of cells overexpressing the wild-type enzyme, demonstrating that PI(3)P is a substrate for myotubularin in vivo. In addition, a Saccharomyces cerevisiae strain in which the myotubularin-like gene (YJR110w) is disrupted also exhibits increased PI(3)P levels. Both the recombinant yeast enzyme and a human myotubularin-related protein (KIAA0371) are able to dephosphorylate PI(3)P in vitro, suggesting that this activity is intrinsic to all myotubularin family members. Mutations in the MTM1 gene that cause human myotubular myopathy dramatically reduce the ability of the phosphatase to dephosphorylate PI(3)P. Our findings provide evidence that myotubularin exerts its effects during myogenesis by regulating cellular levels of the inositol lipid PI(3)P.X -linked myotubular myopathy is a severe congenital disorder in which the muscle cells of affected individuals contain large, centrally placed nuclei and structural features characteristic of fetal myotubes, suggesting that differentiation has been arrested at a step preceding myofiber formation (1-4). The myotubularin gene (MTM1), which is mutated in X-linked myotubular myopathy, encodes a protein with sequence similarity to dual specificity protein tyrosine phosphatases (5). Myotubularin contains the Cys-X 5 -Arg (CX 5 R) active site motif that is the hallmark of the protein tyrosine phosphatase (PTP) superfamily and exhibits dual specificity protein phosphatase activity in vitro (6-9). In addition, myotubularin-related proteins are conserved among eukaryotes, suggesting a common substrate or function (5, 9). However, the physiologic target(s) of myotubularin and its essential role in myogenic development have yet to be identified.Phosphoinositides produced by the actions of phosphatidylinositol (PI) 3-kinases play key roles in a diverse array of cellular processes, including responses to extracellular agonists, growth, survival, cytoskeletal organization, differentiation, and membrane trafficking (10)(11)(12)(13)(14). Recently, the PTEN͞MMAC1 gene was identified as a candidate tumor suppressor gene, which mapped to chromosome 10q23, a region frequently mutated in a variety of tumors (15, 16). The PTEN͞MMAC1 gene encodes a protein with similarity to dual specificity protein tyrosine phosphatases (15,16). Our laboratory has shown that PTEN (phosphatase and tensin homolog) dephosphorylates the lipid second messenger phosphatidylinositol 3,4,5-trisphosphate (PI (3,4,5)P 3 ), thus identifying it as the first PTP superfamily enzyme that utilizes an inositol lipid as its physiologic substr...