Inositol-5-phosphatases are important enzymes involved in the regulation of diverse cellular processes from synaptic vesicle recycling to insulin signaling. We describe a comparative study of two representative inositol-5-phosphatases, Schizosaccharomyces pombe synaptojanin (SPsynaptojanin) and human SH2 domaincontaining inositol-5-phosphatase SHIP2. We show that in addition to Mg 2؉ , transition metals such as Mn 2؉ , Co 2؉ , and Ni 2؉ are also effective activators of SPsynaptojanin. In contrast, Ca 2؉ and Cu 2؉ are inhibitory. We provide evidence that Mg 2؉ binds the same site occupied by Ca 2؉ observed in the crystal structure of SPsynaptojanin complexed with inositol 1,4-bisphosphate (Ins(1,4)P 2 ). Ionizations important for substrate binding and catalysis are defined for the SPsynaptojanin-catalyzed Ins(1,4,5)P 3 reaction. Kinetic analysis with four phosphatidylinositol lipids bearing a 5-phosphate and 54 water-soluble inositol phosphates reveals that SPsynaptojanin and SHIP2 possess much broader substrate specificity than previously appreciated. The rank order for SPsynaptojanin is Ins(2,4,5)P 3 > phosphatidylinositol-4,5-bisphosphate (PtdIns(4,5)P 2 ) Ϸ Ins(4,5)P 2 Ϸ Ins(1,4,5)P 3 Ϸ Ins(4,5,6)P 3 > PtdIns(3,5)P 2 Ϸ PtdIns(3,4,5)P 3 Ϸ Ins(1,2,4,5)P 4 Ϸ Ins(1,3,4,5)P 4 Ϸ Ins-(2,4,5,6)P 4 Ϸ Ins(1,2,4,5,6)P 5 . The rank order for SHIP2 is Ins(1,2,3,4,5)P 5 > Ins(1,3,4,5)P 4 > PtdIns(3,4,5)P 4 Ϸ PtdIns(3,5)P 2 Ϸ Ins(1,4,5,6)P 4 Ϸ Ins(2,4,5,6)P 4 . Because inositol phosphate isomers elicit different biological activities, the extended substrate specificity for SPsynaptojanin and SHIP2 suggest that these enzymes likely have multiple roles in cell signaling and may regulate distinct pathways. The unique substrate specificity profiles and the importance of 2-position phosphate in binding also have important implications for the design of potent and selective SPsynaptojanin and SHIP2 inhibitors for pharmacological investigation.Eukaryotic cells contain both water-soluble inositol phosphates and the corresponding phosphoinositide lipids. These molecules reside in different cellular compartments and regulate the localization and activity of proteins through their interaction with specific binding domains. Inositol and phosphatidylinositol phosphates are key modulators of cellular processes including signal transduction, cell proliferation, and apoptosis, vesicle trafficking, cell motility and cytoskeletal organization, and transcription (1-5). The best known inositolbased signaling pathway is the cell surface receptor-triggered hydrolysis of phosphatidylinositol 4,5-bisphosphate (PtdIns-(4,5)P 2 )1 by phospholipase C to yield the second messengers inositol 1,4,5-triphosphate (Ins(1,4,5)P 3 ), a regulator of Ca 2ϩ release, and diacylglycerol, an activator of protein kinase C. The activity of the inositol-based molecules depends on which site(s) on the inositol ring is phosphorylated, and the level of phosphorylation is maintained by the combined action of a host of inositol kinases and phosphatases. Although consider...