Syndecan-4, a transmembrane heparan sulfate proteoglycan, is a coreceptor with integrins in cell adhesion. It has been suggested to form a ternary signaling complex with protein kinase Calpha and phosphatidylinositol 4,5-bisphosphate (PIP2). Syndecans each have a unique, central, and variable (V) region in their cytoplasmic domains, and that of syndecan-4 is critical to its interaction with protein kinase C and PIP2. Two oligopeptides corresponding to the variable region (4V) and whole domain (4L) of syndecan-4 cytoplasmic domain were synthesized for nuclear magnetic resonance (NMR) studies. Data from NMR and circular dichroism indicate that the cytoplasmic domain undergoes a conformational transition and forms a symmetric dimer in the presence of phospholipid activator PIP2. The solution conformations of both free and PIP2-complexed 4V have been determined by two-dimensional NMR spectroscopy and dynamical simulated annealing calculations. The 4V peptide in the presence of PIP2 formed a compact dimer with two twisted strands packed parallel to each other and the exposed surface of the dimer consisted of highly charged and polar residues. The overall three-dimensional structure in solution exhibits a twisted clamp shape having a cavity in the center of dimeric interface. In addition, it has been observed that the syndecan-4V strongly interacts not only with fatty acyl groups but also the anionic head group of PIP2. These findings reveal that PIP2 promotes oligomerization of syndecan-4 cytoplasmic domain for transmembrane signaling and cell-matrix adhesion.