Lipid second messengers generated by phosphoinositide (PI) 3-kinases regulate diverse cellular functions through interaction with pleckstrin homology (PH) domains in modular signaling proteins. The PH domain of Grp1, a PI 3-kinase-activated exchange factor for Arf GTPases, selectively binds phosphatidylinositol 3,4,5-trisphosphate with high affinity. We have determined the structure of the Grp1 PH domain in the unliganded form and bound to inositol 1,3,4,5-tetraphosphate. A novel mode of phosphoinositide recognition involving a 20-residue insertion within the beta6/beta7 loop explains the unusually high specificity of the Grp1 PH domain and the promiscuous 3-phosphoinositide binding typical of several PH domains including that of protein kinase B. When compared to other PH domains, general determinants of 3-phosphoinositide recognition and specificity can be deduced.