Serum and glucocorticoid regulated kinase 1 (SGK1) has been identified as a key regulatory protein that controls a diverse set of cellular processes including sodium (Na(+)) homeostasis, osmoregulation, cell survival, and cell proliferation. Two other SGK isoforms, SGK2 and SGK3, have been identified, which differ most markedly from SGK1 in their NH(2)-terminal domains. We found that SGK1 and SGK3 are potent stimulators of epithelial Na(+) channel (ENaC)-dependent Na(+) transport, while SGK2, which has a short NH(2) terminus, is a weak stimulator of ENaC. Further characterization of the role of the SGK1 NH(2) terminus revealed that its deletion does not affect in vitro kinase activity but profoundly limits the ability of SGK1 either to stimulate ENaC-dependent Na(+) transport or inhibit Forkhead-dependent gene transcription. The NH(2) terminus of SGK1, which shares sequence homology with the phosphoinositide 3-phosphate [PI(3)P] binding domain of SGK3, binds phosphoinositides in protein lipid overlay assays, interacting specifically with PI(3)P, PI(4)P, and PI(5)P, but not with PI(3,4,5)P(3). Moreover, a point mutation that reduces phosphoinositide binding to the NH(2) terminus also reduces SGK1 effects on Na(+) transport and Forkhead activity. These data suggest that the NH(2) terminus, although not required for PI 3-kinase-dependent modulation of SGK1 catalytic activity, is required for multiple SGK1 functions, including stimulation of ENaC and inhibition of the proapoptotic Forkhead transcription factor. Together, these observations support the idea that the NH(2)-terminal domain acts downstream of PI 3-kinase-dependent activation to target the kinase to specific cellular compartments and/or substrates, possibly through its interactions with a subset of phosphoinositides.