INPPL1 is a phosphatidylinositol (PtdIns) phosphatase that specifically hydrolyzes the 5-phosphate of phosphatidylinositol-3,4,5-trisphosphate (PtdIns(3,4,5)P3) to produce PtdIns(3,4)P2, thereby negatively regulating the PI3K (phosphoinositide 3-kinase) pathways with wide reaching effects It plays a central role in regulation of PI3K-dependent insulin signaling and confers resistance to dietary obesity. It is part of a signaling pathway that regulates actin cytoskeleton remodeling. It regulates cell adhesion and cell spreading and acts as a regulator of neuritogenesis. It acts as a negative regulator of the FC-gamma-RIIA receptor (FCGR2A). and mediates signaling from the FC-gamma-RIIB receptor (FCGR2B), playing a central role in terminating signal transduction from activating immune/hematopoietic cell receptor systems. It is involved in the EGF signaling pathway.

Cytoplasm: cytosol and cytoskeleton; actin patch. Membrane; Peripheral membrane protein. Note: Translocates to membrane ruffles when activated, translocation is probably due to different mechanisms depending on the stimulus and cell type.