Subcellular retrograde transport of cargo receptors from endosomes to the trans-Golgi network is critically involved in a broad range of physiological and pathological processes and highly regulated by a genetically conserved heteropentameric complex, termed retromer. Among the retromer components identified in mammals, sorting nexin 5 and 1 (SNX5; SNX1) have recently been found to interact, possibly controlling the membrane binding specificity of the complex. To elucidate how the unique sequence features of the SNX5 phox domain (SNX5-PX) influence retrograde transport, we have determined the SNX5-PX structure by NMR and x-ray crystallography at 1.5 A resolution. Although the core fold of SNX5-PX resembles that of other known PX domains, we found novel structural features exclusive to SNX5-PX. It is most noteworthy that in SNX5-PX, a long helical hairpin is added to the core formed by a new alpha2'-helix and a much longer alpha3-helix. This results in a significantly altered overall shape of the protein. In addition, the unique double PXXP motif is tightly packed against the rest of the protein, rendering this part of the structure compact, occluding parts of the putative phosphatidylinositol (PtdIns) binding pocket. The PtdIns binding and specificity of SNX5-PX was evaluated by NMR titrations with eight different PtdIns and revealed that SNX5-PX preferentially and specifically binds to phosphatidylinositol 4,5-bisphosphate (PtdIns(4,5)P(2)). The distinct structural and PtdIns binding characteristics of SNX5-PX impart specific properties on SNX5, influencing retromer-mediated regulation of retrograde trafficking of transmembrane cargo receptors.