The spatial activation of phosphoinositide 3-kinase (PI3-kinase) signaling at the axon growth cone generates phosphatidylinositol 3,4,5 trisphosphate (PtdIns(3,4,5)P3), which localizes and facilitates Akt activation and stimulates GSK-3beta inactivation, promoting microtubule polymerization and axon elongation. However, the molecular mechanisms that govern the spatial down-regulation of PtdIns(3,4,5)P3 signaling at the growth cone remain undetermined. The inositol polyphosphate 5-phosphatases (5-phosphatase) hydrolyze the 5-position phosphate from phosphatidylinositol 4,5 bisphosphate (PtdIns(4,5)P2) and/or PtdIns(3,4,5)P3. We demonstrate here that PIPP, an uncharacterized 5-phosphatase, hydrolyzes PtdIns(3,4,5)P3 forming PtdIns(3,4)P2, decreasing Ser473-Akt phosphorylation. PIPP is expressed in PC12 cells, localizing to the plasma membrane of undifferentiated cells and the neurite shaft and growth cone of NGF-differentiated neurites. Overexpression of wild-type, but not catalytically inactive PIPP, in PC12 cells inhibited neurite elongation. Targeted depletion of PIPP using RNA interference (RNAi) resulted in enhanced neurite differentiation, associated with neurite hyperelongation. Inhibition of PI3-kinase activity prevented neurite hyperelongation in PIPP-deficient cells. PIPP targeted-depletion resulted in increased phospho-Ser473-Akt and phospho-Ser9-GSK-3beta, specifically at the neurite growth cone, and accumulation of PtdIns(3,4,5)P3 at this site, associated with enhanced microtubule polymerization in the neurite shaft. PIPP therefore inhibits PI3-kinase-dependent neurite elongation in PC12 cells, via regulation of the spatial distribution of phospho-Ser473-Akt and phospho-Ser9-GSK-3beta signaling.