VINCULIN, a prominent cytoskeletal protein at cell-substrate adhesions (focal adhesions) and cell-cell adhesions (adherens junctions)(1), interacts with other cytoskeletal proteins, including talin and actin(2,3). An intramolecular interaction between the head and tail domains of vinculin masks the binding sites for both proteins(4,5). The exposure of cryptic binding sites may be important for promoting focal adhesion assembly. Several agents that induce the formation of focal adhesions act through the GTP-binding protein Rho(6-9), which elevates phosphatidylinositol-4,5-bisphosphate (PtdInsP(2)) levels by activating phosphatidylinositol-4-phosphate-5-OH kinase (PtdIns-5-OH kinase)(10). PtdInsP(2) regulates several actin-binding proteins, including profilin(11), gelsolin(12) and alpha-actinin(13), and interacts with vinculin(14,15). Here we report that PtdInsP(2) dissociates vinculin’s head-tail interaction, unmasking its talin- and actin-binding sites. Microinjection of antibodies against PtdInsP(2) inhibit assembly of stress fibres and focal adhesions.