In cells that exhibit caveolae, the hormone-sensitive pool of PtdIns 4,5-P2 is localized in a low density, caveolin-enriched membrane fraction (1). Neuro 2a cells do not express caveolin. Nonetheless, the PtdIns 4,5-P2 in these cells is compartmentalized in a low density, detergent-insoluble domain that also contains other signaling-related molecules. Compartmentalization of PtdIns 4,5-P2 was observed regardless of whether Triton X-100-containing or detergent-free methods were used to prepare the membranes. However, the partitioning of receptor tyrosine kinases and GPI-anchored proteins into the low density domains was dependent upon the method of membrane preparation. Treatment of Neuro 2a cells with cyclodextrin delocalized the PtdIns 4,5-P2 and inhibited hormone-stimulated PtdIns turnover. These results suggest that compartmentalization of PtdIns 4,5-P2 does not require caveolin but is necessary for the proper functioning of phosphoinositide-based signaling.