A variety of studies have implicated the lipid PtdIns(4,5)P₂ in endocytic internalization, but how this lipid mediates its effects is not known. The AP180 N-terminal homology (ANTH) domain is a PtdIns(4,5)P₂-binding module found in several proteins that participate in receptor-mediated endocytosis. One such protein is yeast Sla2p, a highly conserved actin-binding protein essential for actin organization and endocytic internalization. To better understand how PtdIns(4,5)P₂ binding regulates actin-dependent endocytosis, we investigated the functions of Sla2p's ANTH domain. A liposome-binding assay revealed that Sla2p binds to PtdIns(4,5)P₂ specifically through its ANTH domain and identified specific lysine residues required for this interaction. Mutants of Sla2p deficient in PtdIns(4,5)P₂ binding showed significant defects in cell growth, actin organization, and endocytic internalization. These defects could be …