The phagocyte oxidase (phox) protein p40phox contains a phox homology (PX) domain which, when expressed alone, interacts with phosphatidylinostol 3-phosphate (PtdIns(3)P). The functions of the PX domain in p40phox localization, association with the cytoskeleton and superoxide production were examined in transgenic COS-7 cells expressing gp91phox, p22phox, p67phox and p47phox (COSphox cells). Full-length p40phox exhibited a cytoplasmic localization pattern in resting cells. Upon stimulation with PMA or fMet-Leu-Phe, p40phox translocated to plasma membrane in a p67phox- and p47phox-dependent manner. Heterologous expression of p40phox markedly enhanced superoxide production in PMA- and fMet-Leu-Phe-stimulated COSphox cells. Unexpectedly, mutation of Arg57 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 p47phox and p67phox. The mutant p40phox (p40R57Q) displayed increased association with actin and moesin, and was found enriched in the Triton X-100 insoluble fraction along with p67phox and p47phox. The enhanced cytoskeleton association of p67phox and p47phox and the dominant inhibitory effect produced by the p40R57Q were alleviated when a second mutation at Asp289, which eliminated p40phox interaction with p67phox, 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 p40phox: 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 p40phox with p67phox.