Bacterial Type III Secretion Systems deliver effectors into host cells to manipulate cellular processes to the advantage of the pathogen. Many host targets of these effectors are found on membranes. Therefore, to identify their targets, effectors often use specialized membrane-localization domains to localize to appropriate host membranes. However, the molecular mechanisms used by many domains are unknown. Here we identify a conserved bacterial phosphoinositide-binding domain (BPD) that is found in functionally diverse Type III effectors of both plant and animal pathogens. We show that members of the BPD family functionally bind phosphoinositides and mediate localization to host membranes. Moreover, NMR studies reveal that the BPD of the newly identified Vibrio parahaemolyticus Type III effector VopR is unfolded in solution, but folds into a specific structure upon binding its ligand phosphatidylinositol-(4,5)-bisphosphate. Thus, our findings suggest a possible mechanism for promoting refolding of Type III effectors after delivery into host cells.