Phosphatidylinositol-3,5-bisphosphate [PtdIns(3,5)P(2)] regulates several vacuolar functions, including acidification, morphology, and membrane traffic. The lipid kinase Fab1 converts phosphatidylinositol-3-phosphate [PtdIns(3)P] to PtdIns(3,5)P(2). PtdIns(3,5)P(2) levels are controlled by the adaptor-like protein Vac14 and the Fig4 PtdIns(3,5)P(2)-specific 5-phosphatase. Interestingly, Vac14 and Fig4 serve a dual function: they are both implicated in the synthesis and turnover of PtdIns(3,5)P(2) by an unknown mechanism. We now show that Fab1, through its chaperonin-like domain, binds to Vac14 and Fig4 and forms a vacuole-associated signaling complex. The Fab1 complex is tethered to the vacuole via an interaction between the FYVE domain in Fab1 and PtdIns(3)P on the vacuole. Moreover, Vac14 and Fig4 bind to each other directly and are mutually dependent for interaction with the Fab1 kinase. Our observations identify a protein complex that incorporates the antagonizing Fab1 lipid kinase and Fig4 lipid phosphatase into a common functional unit. We propose a model explaining the dual roles of Vac14 and Fig4 in the synthesis and turnover of PtdIns(3,5)P(2).