We show that a novel PTEN-like phosphatase (FLIP) exhibits a unique preference for phosphatidylinositol 5-phosphate (PI(5)P) as a substrate in vitro. PI(5)P is the least characterized member of the phosphoinositide (PI) family of lipid signaling molecules. Recent studies suggest a role for PI(5)P in a variety of cellular events, such as tumor suppression, and in response to bacterial invasion. Determining the means by which PI(5)P levels are regulated is therefore key to understanding these cellular processes. PLIP is highly enriched in testis tissue and, similar to other PI phosphatases, exhibits poor activity against several proteinaceous substrates. Despite a recent report suggesting a role for PI(5)P in the regulation of Akt, the overexpression of wild-type or catalytically inactive PLIP in Chinese hamster ovary-insulin receptor cells or a dsRNA-mediated knockdown of PLIP mRNA levels in Drosophila S2 cells does not alter Akt activity or phosphorylation. The unique in vitro catalytic activity and detailed biochemical and kinetic analyses reported here will be of great value in our continued efforts to identify in vivo substrate(s) for this highly conserved phosphatase.