In macrophages, enzymes that synthesize or hydrolyze phosphatidylinositol (3,4,5)-trisphosphate [PI(3,4,5)P(3)] regulate Fcgamma receptor-mediated phagocytosis. Inhibition of phosphatidylinositol 3-kinase (PI3K) or overexpression of the lipid phosphatases phosphatase and tensin homologue (PTEN) and Src homology 2 domain-containing inositol phosphatase (SHIP-1), which hydrolyze PI(3,4,5)P(3) to phosphatidylinositol 4,5-bisphosphate and phosphatidylinositol 3,4-bisphosphate [PI(3,4)P(2)], respectively, inhibit phagocytosis in macrophages. To examine how these enzymes regulate phagosome formation, the distributions of yellow fluorescent protein (YFP) chimeras of enzymes and pleckstrin homology (PH) domains specific for their substrates and products were analyzed quantitatively. PTEN-YFP did not localize to phagosomes, suggesting that PTEN regulates phagocytosis globally within the macrophage. SHIP1-YFP and p85-YFP were recruited to forming phagosomes. SHIP1-YFP sequestered to the leading edge and dissociated from phagocytic cups earlier than did p85-cyan fluorescent protein, indicating that SHIP-1 inhibitory activities are restricted to the early stages of phagocytosis. PH domain chimeras indicated that early during phagocytosis, PI(3,4,5)P(3) was slightly more abundant than PI(3,4)P(2) at the leading edge of the forming cup. These results support a model in which phagosomal PI3K generates PI(3,4,5)P(3) necessary for later stages of phagocytosis, PTEN determines whether those late stages can occur, and SHIP-1 regulates when and where they occur by transiently suppressing PI(3,4,5)P(3)-dependent activities necessary for completion of phagocytosis.