Phosphatidylinositol 4,5-bisphosphate (PIP2) is an important cellular effector whose functions include the regulation of ion channels and membrane trafficking. Aberrant PIP 2 metabolism has also been implicated in a variety of human disease states, e.g., cancer and diabetes. Here we report that familial Alzheimer's disease (FAD)-associated presenilin mutations cause an imbalance in PIP 2 metabolism. We find that the transient receptor potential melastatin 7 (TRPM7)-associated Mg 2؉ -inhibited cation (MIC) channel underlies ion channel dysfunction in presenilin FAD mutant cells, and the observed channel deficits are restored by the addition of PIP 2, a known regulator of the MIC/TRPM7 channel. Lipid analyses show that PIP 2 turnover is selectively affected in FAD mutant presenilin cells. We also find that modulation of cellular PIP 2 closely correlates with 42-residue amyloid -peptide (A42) levels. Our data suggest that PIP 2 imbalance may contribute to Alzheimer's disease pathogenesis by affecting multiple cellular pathways, such as the generation of toxic A42 as well as the activity of the MIC/TRPM7 channel, which has been linked to other neurodegenerative conditions. Thus, our study suggests that brain-specific modulation of PIP 2 may offer a therapeutic approach in Alzheimer's disease.-amyloid precursor protein ͉ channel ͉ secretase ͉ transient receptor potential melastatin 7 (TRPM7) ͉ capacitative calcium entry