Agonist stimulation of cells results in phosphatidylinositol turnover and the generation of inositol 1,4,5-trisphosphate (Ins(1,4,5)P3), which mobilizes intracellular calcium. The inositol-polyphosphate 5-phosphatase (5-phosphatase) enzymes hydrolyze Ins(1,4,5)P3 in a signal-terminating reaction. We have isolated a 2.7-kilobase (kb) composite cDNA, encoding the 43-kDa membrane-associated 5-phosphatase, by screening a human placental lambda gt11 library, using degenerate oligonucleotides. The 2.7-kb cDNA contains a 1.1-kb open reading frame, comprising 363 amino acids, which encodes a protein of a predicted molecular mass of 42 kDa. Amino acid sequence analysis demonstrates a number of potential sites for phosphorylation by protein kinase C and a CAAX motif in the COOH terminus, which may mediate membrane localization. The recombinant enzyme was expressed in COS-7 cells, resulting in a 50-fold increase in enzyme activity in the detergent-soluble membrane fraction of the cell (nanomole of Ins(1,4,5)P3 hydrolyzed per min/mg), but only a 2.5-fold increase in 5-phosphatase activity in the total cell homogenate. Sequence analysis demonstrated a 73-amino acid domain in the COOH terminus of the 43-kDa membrane-associated 5-phosphatase, which had 30% sequence identity and 67% similarity to a region in the 75-kDa 5-phosphatase and 34% identity and 70% similarity to a sequence in the protein that is encoded by the gene, defective in Lowe's oculocerebrorenal syndrome. As shown by RNA analysis the 43-kDa membrane-associated 5-phosphatase appears to be predominantly expressed in heart, brain, and skeletal muscle.