Sequence analysis of Saccharomyces cerevisiae chromosome IX identified a 946 amino acid open reading frame (YIL002C), designated here as INP51, that has carboxyl-and amino-terminal regions similar to mammalian inositol polyphosphate 5-phosphatases and to yeast SAC1. This two-domain primary structure resembles the mammalian 5-phosphatase, synaptojanin. We report that Inp51p is associated with a particulate fraction and that recombinant Inp51p exhibits intrinsic phosphatidylinositol 4,5-bisphosphate 5-phosphatase activity. Deletion of INP51 (inp51) results in a "coldtolerant" phenotype, enabling significantly faster growth at temperatures below 15°C as compared with a parental strain. Complementation analysis of an inp51 mutant strain demonstrates that the cold tolerance is strictly due to loss of 5-phosphatase catalytic activity. Furthermore, deletion of PLC1 in an inp51 mutant does not abrogate cold tolerance, indicating that Plc1p-mediated production of soluble inositol phosphates is not required. Cells lacking INP51 have a 2-4-fold increase in levels of phosphatidylinositol 4,5-bisphosphate and inositol 1,4,5-trisphosphate, whereas cells overexpressing Inp51p exhibit a 35% decrease in levels of phosphatidylinositol 4,5-bisphosphate. We conclude that INP51 function is critical for proper phosphatidylinositol 4,5-bisphosphate homeostasis. In addition, we define a novel role for a 5-phosphatase loss of function mutant that improves the growth of cells at colder temperatures without alteration of growth at normal temperatures, which may have useful commercial applications.Of central importance to the inositol signaling pathway is phosphatidylinositol 4,5-bisphosphate (PI(4,5)P 2 ), 1 which serves as a precursor to second messengers and is a signaling molecule itself (1-3). PI(4,5)P 2 has a direct functional role in signaling via interactions with actin-binding proteins, phospholipase D, and pleckstrin homology domains (3-7). Levels of PI(4,5)P 2 are tightly maintained by a balance of kinase, lipase, transferase, and phosphatase activities. The importance of this regulation is manifested by disease states that arise as a result of mutation in these enzymes. For example, in Drosophila deletion of the norpA phospholipase C ␤ gene results in blindness (8); ablation of an eye-specific CDP-diacylglycerol synthetase results in retinal degeneration that can be pharmacologically rescued by re-addition of PI(4,5)P 2 (9); and recent studies by Milligan et al. (10) demonstrate that the phosphatidylinositol transfer protein domain of the rdgB gene is necessary for proper photoreceptor function in response to prolonged light stimuli and serves to protect photoreceptor degeneration. In addition, the human disease oculocerebrorenal syndrome (Lowe's syndrome) arises from mutations in the OCRL-1 gene (11), which encodes an inositol polyphosphate 5-phosphatase (5-ptase) (12).5-Ptase enzymes comprise a family of critical proteins that remove the 5-position phosphate from either soluble or lipid inositol polyphosphates, or both (revi...