Reversible interactions between cytosolic proteins and membrane lipids such as phosphoinositides play important roles in membrane morphogenesis driven by actin polymerization. In this paper, we identify a novel lipid-binding module, which we call the SYLF domain (after the SH3YL1, Ysc84p/Lsb4p, Lsb3p, and plant FYVE proteins that contain it), that is highly conserved from bacteria to mammals. SH3YL1 (SH3 domain containing Ysc84-like 1) strongly bound to phosphatidylinositol 3,4,5-triphosphate (PI(3,4,5)P(3)) and several D5-phosphorylated phosphoinositides through its SYLF domain and was localized to circular dorsal ruffles induced by platelet-derived growth factor stimulation. Interestingly, SHIP2 (the PI(3,4,5)P(3) 5-phosphatase, src-homology 2-containing inositol-5-phosphatase 2) was identified as a binding partner of SH3YL1, and knockdown of these proteins significantly suppressed dorsal ruffle formation. Phosphatidylinositol 3,4-bisphosphate (PI(3,4)P(2)), which is mainly synthesized from PI(3,4,5)P(3) by the action of SHIP2, was enriched in dorsal ruffles, and PI(3,4)P(2) synthesis strongly correlated with formation of the circular membrane structure. These results provide new insight into the molecular mechanism of dorsal ruffle formation and its regulation by phosphoinositide metabolism.