The cDNA for a human Class II phosphoinositide 3-kinase (PI 3-kinase C2beta) with a C2 domain was cloned from a U937 monocyte cDNA library and the enzyme expressed in mammalian and insect cells. Like other Class II PI 3-kinases in vitro, PI 3-kinase C2beta utilizes phosphatidylinositol (PI) and PI 4-monophosphate but not PI 4, 5-biphosphate as substrates in the presence of Mg2+. Remarkably, and unlike other PI 3-kinases, the enzyme can use either Mg-ATP or Ca-ATP to generate PI 3-monophosphate. PI 3-kinase C2beta, like the Class I PI 3-kinases, but unlike PI 3-kinase C2alpha, is sensitive to low nanomolar levels of the inhibitor wortmannin. The enzyme is not regulated by the small GTP-binding protein Ras. The C2 domain of the enzyme bound anionic phospholipids such as PI and phosphatidylserine in vitro, but did not co-operatively bind Ca2+ and phospholipids. Deletion of the C2 domain increased the lipid kinase activity suggesting that it functions as a negative regulator of the catalytic domain. Although presently it is not known whether PI 3-kinase C2beta is regulated by Ca2+ in vivo, our results suggest a novel role for Ca2+ ions in phosphate transfer reactions.