We report the cDNA cloning and characterization of a novel human inositol polyphosphate 5-phosphatase (5-phosphatase) that has substrate specificity unlike previously described members of this large gene family. All previously described members hydrolyze water soluble inositol phosphates. This enzyme hydrolyzes only lipid substrates, phosphatidylinositol 3,4,5-trisphosphate and phosphatidylinositol 4,5-bisphosphate. The cDNA isolated comprises 3110 base pairs and predicts a protein product of 644 amino acids and M(r) = 70,023. We designate this 5-phosphatase as type IV. It is a highly basic protein (pI = 8.8) and has the greatest affinity toward phosphatidylinositol 3,4,5-trisphosphate of known 5-phosphatases. The K(m) is 0.65 micrometer, 1/10 that of SHIP (5.95 micrometer), another 5-phosphatase that hydrolyzes phosphatidylinositol 3,4,5-trisphosphate. The activity of 5-phosphatase type IV is sensitive to the presence of detergents in the in vitro assay. Thus the enzyme hydrolyzes lipid substrates in the absence of detergents or in the presence of n-octyl beta-glucopyranoside or Triton X-100, but not in the presence of cetyltriethylammonium bromide, the detergent that has been used in other studies of the hydrolysis of phosphatidylinositol 4,5-bisphosphate. Remarkably SHIP, a 5-phosphatase previously characterized as hydrolyzing only substrates with d-3 phosphates, also readily hydrolyzed phosphatidylinositol 4,5-bisphosphate in the presence of n-octyl beta-glucopyranoside but not cetyltriethylammonium bromide. We used antibodies prepared against a peptide predicted by the cDNA to identify the 5-phosphatase type IV enzyme in human tissues and find that it is highly expressed in the brain as determined by Western blotting. We also performed Western blotting of mouse tissues and found high levels of expression in the brain, testes, and heart with lower levels of expression in other tissues. mRNA was detected in many tissues and cell lines as determined by Northern blotting.