Phosphatidylinositol 4,5-bisphosphate (PI(4,5)P(2)) is an important second messenger in signaling pathways in organisms ranging from yeast to mammals, but the regulation of PI(4,5)P(2) levels remains unclear. Here we present evidence that PI(4,5)P(2) levels in Saccharomyces cerevisiae are down-regulated by the homologous and functionally redundant proteins TAX4 and IRS4. The EPS15 homology domain-containing proteins TAX4 and IRS4 bind and activate the PI(4,5)P 5-phosphatase INP51 via an Asn-Pro-Phe motif in INP51. Furthermore, the INP51-TAX4/IRS4 complex negatively regulates the cell integrity pathway. Thus, TAX4 and IRS4 are novel regulators of PI(4,5)P(2) and PI(4,5)P(2)-dependent signaling. The interaction between TAX4/IRS4 and INP51 is analogous to the association of EPS15 with the 5-phosphatase synaptojanin 1 in mammalian cells, suggesting that EPS15 is an activator of synaptojanin 1.