The calcium-dependent activator protein for secretion (CAPS) is a novel neural/endocrine-specific cytosolic and peripheral membrane protein required for the Ca2+-regulated exocytosis of secretory vesicles. CAPS acts at a stage in exocytosis that follows ATP-dependent priming, which involves the essential synthesis of phosphatidylinositol 4,5-bisphosphate (PtdIns(4,5)P2). In the present studies, CAPS is shown to bind liposomes that contain acidic phospholipids and binding was markedly enhanced by inclusion of PtdIns(4,5)P2 but not other phosphoinositides in the absence of Ca2+. PtdIns(4,5)P2, but not other phosphoinositides including PtdIns(3, 4)P2 and PtdIns(3,4,5)P3, altered the susceptibility of CAPS to proteolysis by trypsin and proteinase K, suggesting that phosphoinositide binding promoted a conformational change. Photoaffinity labeling studies with a photoactivatable benzoylcinnimidyl acyl chain derivative of PtdIns(4,5)P2 confirmed the phosphoinositide-binding properties of CAPS and suggested a hydrophobic aspect of the interaction. CAPS, as one of very few characterized proteins with a binding specificity for 4-, 5-phosphorylated inositides over 3-phosphorylated inositides, may function in regulated exocytosis as an effector of PtdIns(4,5)P2.