The phosphatidylinositol 3-kinase (PI 3'-K) family of lipid kinases play a critical role in cell proliferation, survival, vesicle trafficking, motility, cytoskeletal rearrangements, and oncogenesis. To identify downstream effectors of PI 3'-K, we developed a novel screen to isolate proteins that bind to the major products of PI 3'-K: phosphatidylinositol-3,4-bisphosphate (PtdIns-3,4-P(2)) and PtdIns-3,4,5-trisphosphate (PtdIns-3,4,5-P(3)). This screen uses synthetic biotinylated analogs of these lipids in conjunction with libraries of radiolabeled proteins that are produced by coupled in vitro transcription/translation reactions. The feasibility of the screen was initially demonstrated using avidin-coated beads prebound to biotinylated PtdIns-3,4-P(2) and PtdIns-3,4,5-P(3) to specifically isolate the pleckstrin homology domain of the serine/threonine kinase Akt. We then demonstrated the utility of this technique in isolating novel 3'-phosphorylated phosphatidylinositol (3'-PPI)-binding proteins through the preliminary screening of in vitro transcribed/translated cDNAs from a small pool expression library derived from mouse spleen. Three proteins were isolated that bound specifically to 3'PPIs. Two of these proteins have been previously characterized as PIP3BP/p42(IP4) and the PtdIns-3,4,5-P(3)-dependent serine/threonine kinase phosphoinositide-dependent kinase 1. The third protein is a novel protein that contains only a Src homology 2 domain and a pleckstrin homology domain; this protein has a higher specificity for both PtdIns-3,4,5-P(3) and PtdIns-3,4-P(2) than for PtdIns-4, 5-bisphosphate. Transcripts of this novel gene are present in every tissue analyzed but are most prominently expressed in spleen. We have renamed this new protein PHISH for 3'-phosphoinositide-interacting Src homology-containing protein. This report demonstrates the utility of this technique for isolating and characterizing 3'-PPI-binding proteins and has broad applicability for the isolation of binding domains for other lipid products.