Sealing of phagosomes is accompanied by the disappearance of phosphatidylinositol (4,5)-bisphosphate (PtdIns(4,5)P(2)) from their cytoplasmic leaflet. Elimination of PtdIns(4,5)P(2), which is required for actin remodeling during phagosome formation, has been attributed to hydrolysis by phospholipase C and phosphorylation by phosphatidylinositol 3-kinase. We found that two inositol 5-phosphatases, OCRL and Inpp5B, become associated with nascent phagosomes. Both phosphatases, which are Rab5 effectors, associate with the adaptor protein APPL1, which is recruited to the phagosomes by active Rab5. Knockdown of APPL1 or inhibition of Rab5 impairs association of OCRL and Inpp5B with phagosomes and prolongs the presence of PtdIns(4,5)P(2) and actin on their membranes. Even though APPL1 can serve as an anchor for Akt, its depletion accentuated the activation of the kinase, likely by increasing the amount of PtdIns(4,5)P(2) available to generate phosphatidylinositol (3,4,5)-trisphosphate. Thus, inositol 5-phosphatases are important contributors to the phosphoinositide remodeling and signaling that are pivotal for phagocytosis.