Subcellular retrograde transport of cargo receptors from endosomes to the trans-Golgi network is critically involved in a broad range of physiological and pathological processes and highly regulated by a genetically conserved heteropentameric complex, termed retromer. Among the retromer components identified in mammals, sorting nexin 5 and 1 (SNX5; SNX1) have recently been found to interact, possibly controlling the membrane binding specificity of the complex. To elucidate how the unique sequence features of the SNX5 phox domain (SNX5-PX) influence retrograde transport, we have determined the SNX5-PX structure by NMR and x-ray crystallography at 1.5 Å resolution. Although the core fold of SNX5-PX resembles that of other known PX domains, we found novel structural features exclusive to SNX5-PX. It is most noteworthy that in SNX5-PX, a long helical hairpin is added to the core formed by a new ␣2-helix and a much longer ␣3-helix. This results in a significantly altered overall shape of the protein. In addition, the unique double PXXP motif is tightly packed against the rest of the protein, rendering this part of the structure compact, occluding parts of the putative phosphatidylinositol (PtdIns) binding pocket. The PtdIns binding and specificity of SNX5-PX was evaluated by NMR titrations with eight different PtdIns and revealed that SNX5-PX preferentially and specifically binds to phosphatidylinositol 4,5-bisphosphate (PtdIns(4,5)P 2 ). The distinct structural and PtdIns binding characteristics of SNX5-PX impart specific properties on SNX5, influencing retromer-mediated regulation of retrograde trafficking of transmembrane cargo receptors.The early work on retromer revealed its role in the trafficking of cargo proteins between endosomes and the trans-Golgi network (TGN), 2 although recently, retromer involvement in many other physiological and developmental processes has been uncovered (1, 2). The best studied proteins associated with retromer activity are intracellular sorting receptors such as the yeast vacuolar protein-10 (Vps10) and mammalian mannose 6-phosphate receptors (3, 4). These receptors sort acid hydrolases, enzymes essential for protein degradation, out of the TGN into the yeast vacuole or the mammalian lysosome. Upon releasing their substrates, these cargos traffic back to the TGN to mediate further rounds of cargo-hydrolase transportation. Similar retrograde trafficking of cargo proteins involving signaling molecules such as Wnt and amyloid precursor protein (APP) are thought to be critical for their secretion and function (5, 6). Retrograde transportation is highly regulated by the heteropentameric retromer complex that consists of a sorting nexin (SNX) dimer (e.g. Vps5 and Vps17 in yeast) and a Vps26/ 29/35 trimer (7). In mammals, the binding of the SNX dimer to specific phosphatidylinositol (PtdIns) determines its subcellular membrane association and governs the recruitment of the Vps trimer to endosomal compartments. Mammalian orthologs of the trimer have been biochemically characterized, and th...