Phosphatidylinositol(4,5) bisphosphate (PI(4,5)P2) has become a major focus in biochemistry, cell biology and physiology owing to its diverse functions at the plasma membrane. As a result, the functions of PI(4,5)P2 can be explored in two separate and distinct roles – as a substrate for phospholipase C (PLC) and phosphoinositide 3-kinase (PI3K) and as a primary messenger, each having unique properties. Thus PI(4,5)P2 makes contributions in both signal transduction and cellular processes including actin cytoskeleton dynamics, membrane dynamics and ion channel regulation. Signalling through plasma membrane G-protein coupled receptors (GPCRs), receptor tyrosine kinases (RTKs) and immune receptors all use PI(4,5)P2 as a substrate to make second messengers. Activation of PI3K generates PI(3,4,5)P3 (phosphatidylinositol(3,4,5)trisphosphate), a lipid that recruits a plethora of proteins with pleckstrin homology (PH) domains to the plasma membrane to regulate multiple aspects of cellular function. In contrast, PLC activation results in the hydrolysis of PI(4,5)P2 to generate the second messengers, diacylglycerol (DAG), an activator of protein kinase C and inositol(1,4,5)trisphosphate (IP3/I(1,4,5)P3) which facilitates an increase in intracellular Ca2+. Decreases in PI(4,5)P2 by PLC also impact on functions that are dependent on the intact lipid and therefore endocytosis, actin dynamics and ion channel regulation are subject to control. Spatial organisation of PI(4,5)P2 in nanodomains at the membrane allows for these multiple processes to occur concurrently.