An inositol polyphosphate-5-phosphatase (SIP-110) that binds the SH3 domains of the adaptor protein GRB2 was produced in Sf9 cells and characterized. SIP-110 binds to GRB2 in vitro with a stoichiometry of 1 mol of GRB2/0.7 mol of SIP-110. GRB2 binding does not affect enzyme activity implying that GRB2 serves mainly to localize SIP-110 within cells. SIP-110 hydrolyses inositol (Ins)(1,3,4,5)P4 to Ins(1, 3,4)P3. The enzyme does not hydrolyze Ins(1,4,5)P3 that is a substrate for previously described 5-phosphatases nor does it hydrolyze phosphatidylinositol (PtdIns)(4,5)P2. SIP-110 also hydrolyzed PtdIns(3,4,5)P3 to PtdIns(3,4)P2 as did recombinant forms of two other 5-phosphatases designated as inositol polyphosphate-5- phosphatase II, and OCRL (the protein that is mutated in oculocerebrorenal syndrome). The inositol polyphosphate-5-phosphatase enzyme family now is represented by at least 9 distinct genes and includes enzymes that fall into 4 subfamilies based on their activities toward various 5-phosphatase substrates.