Phox homology (PX) domains have been recently identified in a number of different proteins and are involved in various cellular functions such as vacuolar targeting and membrane protein trafficking. It was shown that these modules of about 130 amino acids specifically binding to phosphoinositides and that this interaction is crucial for their cellular function. The yeast genome contains 17 PX domain proteins. One of these, Grd19p, is involved in the localization of the late Golgi membrane proteins DPAP A and Kex2p. Grd19p consists of the PX domain with 30 extra residues at the N-terminal and is homologous to the functionally characterized human sorting nexin protein SNX3. We determined the 2.0 A crystal structure of Grd19p in the free form and in complex with d-myo-phosphatidylinositol 3-phosphate (diC4PtdIns(3)P), representing the first case of both free and ligand-bound conformations of the same PX module. The ligand occupies a well defined positively charged binding pocket at the interface between the beta-sheet and alpha-helical parts of the molecule. The structure of the free and bound protein are globally similar but show some significant differences in a region containing a polyproline peptide and a putative membrane attachment site.