The budding yeast Saccharomyces cerevisiae has four inositol polyphosphate 5-phosphatase (5-phosphatase) genes, INP51, INP52, INP53, and INP54, all of which hydrolyze phosphatidylinositol (4,5)-bisphosphate. INP54 encodes a protein of 44 kDa which consists of a 5-phosphatase domain and a C-terminal leucine-rich tail, but lacks the N-terminal SacI domain and proline-rich region found in the other three yeast 5-phosphatases. We report that Inp54p belongs to the family of tail-anchored proteins and is localized to the endoplasmic reticulum via a C-terminal hydrophobic tail. The hydrophobic tail comprises the last 13 amino acids of the protein and is sufficient to target green fluorescent protein to the endoplasmic reticulum. Protease protection assays demonstrated that the N terminus of Inp54p is oriented toward the cytoplasm of the cell, with the C terminus of the protein also exposed to the cytosol. Null mutation of INP54 resulted in a 2-fold increase in secretion of a reporter protein, compared with wild-type yeast or cells deleted for any of the SacI domain-containing 5-phosphatases. We propose that Inp54p plays a role in regulating secretion, possibly by modulating the levels of phosphatidylinositol (4,5)-bisphosphate on the cytoplasmic surface of the endoplasmic reticulum membrane.