Recent studies have shown that phox homology (PX) domains act as phosphoinositide-binding motifs. The majority of PX domains studied show binding to phosphatidylinositol 3-monophosphate (PtdIns(3)P), an association that allows the host protein to localize to membranes of the endocytic pathway. One issue, however, is whether PX domains may have alternative phosphoinositide binding specificities that could target their host protein to distinct subcellular compartments or allow their allosteric regulation by phosphoinositides other than PtdIns(3)P. It has been reported that the PX domain of sorting nexin 1 (SNX1) specifically binds phosphatidylinositol 3,4,5-trisphosphate (PtdIns(3,4,5)P(3)) (Zhong, Q., Lazar, C. S., Tronchere, H., Sato, T., Meerloo, T., Yeo, M., Songyang, Z., Emr, S. D., and Gill, G. N. (2002) Proc. Natl. Acad. Sci. U. S. A. 99, 6767-6772). In the present study, we have shown that whereas SNX1 binds PtdIns(3,4,5)P(3) in protein:lipid overlay assays, in liposomes-based assays, binding is observed to PtdIns(3)P and phosphatidylinositol 3,5-bisphosphate (PtdIns(3,5)P(2)) but not to PtdIns(3,4,5)P(3). To address the significance of PtdIns(3,4,5)P(3) binding, we examined the subcellular localization of SNX1 under conditions in which plasma membrane PtdIns(3,4,5)P(3) levels were significantly elevated. Under these conditions, we failed to observe association of SNX1 with this membrane. However, consistent with the binding to PtdIns(3)P and PtdIns(3,5)P(2) being of more physiological significance was the observation that the association of SNX1 with an early endosomal compartment was dependent on a 3-phosphoinositide-binding PX domain and the presence of PtdIns(3)P on this compartment. Finally, we have shown that the PX domain-dependent/early endosomal association of SNX1 is important for its ability to regulate the targeting of internalized epidermal growth factor receptor for lysosomal degradation.