The phagocyte oxidase (Phox) protein p40(phox) contains a Phox homology (PX) domain which, when expressed alone, interacts with phosphatidylinositol 3-phosphate (PtdIns ( 3) P). The functions of the PXdomain in p40(phox) localization, association with the cytoskeleton, and superoxide production were examined in transgenic COS-7 cells expressing gp91(phox), p22(phox), p67(phox), and p47(phox) (COSphox cells). Full-length p40(phox) exhibited a cytoplasmic localization pattern in resting cells. Upon stimulation with phorbol 12-myristate 13-acetate or fMet-Leu-Phe, p40(phox) translocated to plasma membrane in a p67(phox)- and p47(phox)-dependent manner. Heterologous expression of p40(phox) markedly enhanced superoxide production in phorbol 12-myristate 13-acetate - and fMet-Leu-Phe- stimulated COSphox cells. Unexpectedly, mutation of Arg-57 in the PX domain to Gln, which abrogated PtdIns (3) P binding, produced a dominant inhibitory effect on agonist-induced superoxide production and membrane translocation of p47(phox) and p67(phox). The mutant p40(phox) (p40R57Q) displayed increased association with actin and moesin and was found enriched in the Triton X-100-insoluble fraction along with p67(phox) and p47(phox). The enhanced cytoskeleton association of p67(phox) and p47(phox) and the dominant inhibitory effect produced by the p40R57Q were alleviated when a second mutation at Asp-289, which eliminated p40(phox) interaction with p67(phox), was introduced. Likewise, cytochalasin B treatment abolished the dominant inhibitory effect of p40R57Q on superoxide production. These findings suggest a dual regulatory mechanism through the PX domain of p40(phox); its interaction with the actin cytoskeleton may stabilize NADPH oxidase in resting cells, and its binding of PtdIns (3) P potentiates superoxide production upon agonist stimulation. Both functions require the association of p40(phox) with p67(phox).