Phosphatidylinositol-4,5-bisphosphate (PtdIns-4,5-P2), a key molecule in the phosphoinositide signalling pathway, was thought to be synthesized exclusively by phosphorylation of PtdIns-4-P at the D-5 position of the inositol ring. The enzymes that produce PtdIns-4,5-P2 in vitro fall into two related subfamilies (type I and type II PtdInsP-5-OH kinases, or PIP(5)Ks) based on their enzymatic properties and sequence similarities'. Here we have reinvestigated the substrate specificities of these enzymes. As expected, the type I enzyme phosphorylates PtdIns-4-P at the D-5 position of the inositol ring. Surprisingly, the type II enzyme, which is abundant in some tissues, phosphorylates PtdIns-5-P at the D-4 position, and thus should be considered as a 4-OH kinase, or PIP(4)K. The earlier error in characterizing the activity of the type II enzyme is due to the presence of contaminating PtdIns-5-P in commercial preparations of PtdIns-4-P. Although PtdIns-5-P was previously thought not to exist in vivo, we find evidence for the presence of this lipid in mammalian fibroblasts, establishing a new pathway for PtdIns-4,5-P2 synthesis.