Phosphoinositides [PPIs, which collectively refer to phosphorylated derivatives of phosphatidylinositol (PI)] have a pivotal role as precursors to important second messengers and as bona fide signaling and scaffold targeting molecules. This review focuses on recent advances that elucidate how PPIs, particularly PI(4,5)P2 (PIP2), directly regulate the actin cytoskeleton in vivo by modulating the activity and targeting of actin regulatory proteins. The role of PIP2 in stimulating actin polymerization and in establishing cytoskeleton-plasma membrane linkages is emphasized. In addition, the review presents tantalizing evidence that suggests how binding of selected cytoskeletal proteins to membrane PPIs may promote PPI clustering into raft lipid microdomains, alter their accessibility to other proteins, and even distort the bilayer conformation. These actions have profound implications for many other PPI-regulated membrane functions that are beginning to be uncovered, and they suggest how PPIs can mediate crosstalk between the actin cytoskeleton and an expanding spectrum of essential cellular functions.