PDZ domain-containing proteins work as intracellular scaffolds to control spatio-temporal aspects of cell signalling. This function is supported by the ability of their PDZ domains to bind other proteins such as receptors, but also phosphoinositide lipids important for membrane trafficking. Here we report a crystal structure of the syntenin PDZ tandem in complex with the carboxy-terminal fragment of Frizzled 7 and phosphatidylinositol 4,5-bisphosphate (PIP2). The crystal structure reveals a tripartite interaction formed via the second PDZ domain of syntenin. Biophysical and biochemical experiments establish co-operative binding of the tripartite complex and identify residues crucial for membrane PIP2-specific recognition. Experiments with cells support the importance of the syntenin-PIP2 interaction for plasma membrane targeting of Frizzled 7 and c-jun phosphorylation. This study contributes to our understanding of the biology of PDZ proteins as key players in membrane compartmentalization and dynamics.