Inpp5b is an ubiquitously expressed type II inositol polyphosphate 5-phosphatase. We have disrupted the Inpp5b gene in mice and found that homozygous mutant males are infertile. Here we examine the causes for the infertility in detail. We demonstrate that sperm from Inpp5b(-/-) males have reduced motility and reduced ability to fertilize eggs, although capacitation and acrosome exocytosis appear to be normal. In addition, fertilin beta, a sperm surface protein involved in sperm-egg membrane interactions that is normally proteolytically processed during sperm transit through the epididymis, showed reduced levels of processing in the Inpp5b(-/-) animals. Inpp5b was expressed in the Sertoli cells and epididymis and at low levels in the developing germ cells; however, mice lacking Inpp5b in spermatids and not in other cell types generated by conditional gene targeting, were fully fertile. The abnormalities in mutant sperm function and maturation appear to arise from defects in the functioning of Sertoli and epididymal epithelial cells. Our results directly demonstrate a previously unknown role for phosphoinositides in normal sperm maturation beyond their previously characterized involvement in the acrosome reaction. Inpp5b(-/-) mice provide an excellent model to study the role of Sertoli and epididymal epithelial cells in the differentiation and maturation of sperm.