Many cellular processes depend on ERM (ezrin, moesin, and radixin) proteins mediating regulated linkage between plasma membrane and actin cytoskeleton. Although conformational activation of the ERM protein is mediated by the membrane PIP2, the known properties of the two described PIP2-binding sites do not explain activation. To elucidate the structural basis of possible mechanisms, we generated informative moesin mutations and tested three attributes: membrane localization of the expressed moesin, moesin binding to PIP2, and PIP2-induced release of moesin autoinhibition. The results demonstrate for the first time that the POCKET containing inositol 1,4,5-trisphosphate on crystal structure (the "POCKET" Lys-63, Lys-278 residues) mediates all three functions. Furthermore the second described PIP2-binding site (the "PATCH," Lys-253/Lys-254, Lys-262/Lys-263) is also essential for all three functions. In native autoinhibited ERM proteins, the POCKET is a cavity masked by an acidic linker, which we designate the "FLAP." Analysis of three mutant moesin constructs predicted to influence FLAP function demonstrated that the FLAP is a functional autoinhibitory region. Moreover, analysis of the cooperativity and stoichiometry demonstrate that the PATCH and POCKET do not bind PIP2 simultaneously. Based on our data and supporting published data, we propose a model of progressive activation of autoinhibited moesin by a single PIP2 molecule in the membrane. Initial transient binding of PIP2 to the PATCH initiates release of the FLAP, which enables transition of the same PIP2 molecule into the newly exposed POCKET where it binds stably and completes the conformational activation.