Protrudin is a FYVE (Fab 1, YOTB, Vac 1, and EEA1) domain-containing protein involved in transport of neuronal cargoes and implicated in the onset of hereditary spastic paraplegia. Our image-based screening of the lipid binding domain library revealed novel plasma membrane localization of the FYVE domain of protrudin unlike canonical FYVE domains that are localized to early endosomes. The membrane binding study by surface plasmon resonance analysis showed that this FYVE domain preferentially binds phosphatidylinositol 4,5-bisphosphate (PtdIns(4,5)P(2)), phosphatidylinositol 3,4-bisphosphate (PtdIns(3,4)P(2)), and phosphatidylinositol 3,4,5-trisphosphate (PtdIns(3,4,5)P(3)) unlike canonical FYVE domains that specifically bind phosphatidylinositol 3-phosphate (PtdIns(3)P). Furthermore, we found that these phosphoinositides (PtdInsP) differentially regulate shuttling of protrudin between endosomes and plasma membrane via its FYVE domain. Protrudin mutants with reduced PtdInsP-binding affinity failed to promote neurite outgrowth in primary cultured hippocampal neurons. These results suggest that novel PtdInsP selectivity of the protrudin-FYVE domain is critical for its cellular localization and its role in neurite outgrowth.