Inositol phospholipids have long been known to have an important regulatory role in cell physiology. The repertoire of cellular processes known to be directly or indirectly controlled by this class of lipids has now dramatically expanded. Through interactions mediated by their headgroups, which can be reversibly phosphorylated to generate seven species, phosphoinositides play a fundamental part in controlling membrane-cytosol interfaces. These lipids mediate acute responses, but also act as constitutive signals that help define organelle identity. Their functions, besides classical signal transduction at the cell surface, include regulation of membrane traffic, the cytoskeleton, nuclear events and the permeability and transport functions of membranes.