Phosphoinositides (PIPs) are ubiquitous regulators of signal transduction events in eukaryotic cells. PIPs are degraded by various enzymes, including PIP phosphatases. The integral membrane Sac1 phosphatases represent a major class of such enzymes. The central role of lipid phosphatases in regulating PIP homeostasis notwithstanding, the biological functions of Sac1-phosphatases remain poorly characterized. Herein, we demonstrate that functional ablation of the single murine Sac1 results in preimplantation lethality in the mouse and that Sac1 insufficiencies result in disorganization of mammalian Golgi membranes and mitotic defects characterized by multiple mechanically active spindles. Complementation experiments demonstrate mutant mammalian Sac1 proteins individually defective in either phosphoinositide phosphatase activity, or in recycling of the enzyme from the Golgi system back to the endoplasmic reticulum, are nonfunctional proteins in vivo. The data indicate Sac1 executes an essential household function in mammals that involves organization of both Golgi membranes and mitotic spindles and that both enzymatic activity and endoplasmic reticulum localization are important Sac1 functional properties.