Profilin is generally thought to regulate actin polymerization, but the observation that acidic phospholipids dissociate the complex of profilin and actin raised the possibility that profilin might also regulate lipid metabolism. Profilin isolated from platelets binds with high affinity to small clusters of phosphatidylinositol 4,5-bisphosphate (PIP2) molecules in micelles and also in bilayers with other phospholipids. The molar ratio of the complex of profilin with PIP2 is 1:7 in micelles of pure PIP2 and 1:5 in bilayers composed largely of other phospholipids. Profilin competes efficiently with platelet cytosolic phosphoinositide-specific phospholipase C for interaction with the PIP2 substrate and thereby inhibits PIP2 hydrolysis by this enzyme. The cellular concentrations and binding characteristics of these molecules are consistent with profilin being a negative regulator of the phosphoinositide signaling pathway in addition to its established function as an inhibitor of actin polymerization.