SHIP-2 is a phosphoinositidylinositol 3,4,5 trisphosphate (PtdIns[3,4,5]P3) 5-phosphatase that contains an NH2-terminal SH2 domain, a central 5-phosphatase domain, and a COOH-terminal proline-rich domain. SHIP-2 negatively regulates insulin signaling. In unstimulated cells, SHIP-2 localized in a perinuclear cytosolic distribution and at the leading edge of the cell. Endogenous and recombinant SHIP-2 localized to membrane ruffles, which were mediated by the COOH-terminal proline-rich domain. To identify proteins that bind to the SHIP-2 proline-rich domain, yeast two-hybrid screening was performed, which isolated actin-binding protein filamin C. In addition, both filamin A and B specifically interacted with SHIP-2 in this assay. SHIP-2 coimmunoprecipitated with filamin from COS-7 cells, and association between these species did not change after epidermal growth factor stimulation. SHIP-2 colocalized with filamin at Z-lines and the sarcolemma in striated muscle sections and at membrane ruffles in COS-7 cells, although the membrane ruffling response was reduced in cells overexpressing SHIP-2. SHIP-2 membrane ruffle localization was dependent on filamin binding, as SHIP-2 was expressed exclusively in the cytosol of filamin-deficient cells. Recombinant SHIP-2 regulated PtdIns(3,4,5)P3 levels and submembraneous actin at membrane ruffles after growth factor stimulation, dependent on SHIP-2 catalytic activity. Collectively these studies demonstrate that filamin-dependent SHIP-2 localization critically regulates phosphatidylinositol 3 kinase signaling to the actin cytoskeleton.