The pleckstrin homology (PH) domain is a new protein module of around 100 amino acids found in several proteins involved in signal transduction. Although its specific function has yet to be elucidated, the carboxy-terminal regions of many PH domains bind to the beta gamma subunits of G proteins. On the basis of structural similarities between PH domains and lipid-binding proteins, we have proposed that PH domains may be binding to lipophilic molecules. Indeed, many of the proteins that contain this domain associate with phospholipid membranes, and disruption of this domain can interfere with membrane association. Here we report that PH domains bind to phosphatidylinositol-4,5-bisphosphate and show that the lipid-binding site is located at the lip of the beta-barrel. This suggests that PH domains may be important for membrane localization of proteins through interactions with phosphatidylinositol-4,5-bisphosphate.