The 75-kDa inositol polyphosphate 5-phosphatase (5-phosphatase II) hydrolyzes various signaling molecules including the following: inositol 1,4,5-trisphosphate, inositol 1,3,4,5-tetrakisphosphate, phosphatidylinositol 4,5-bisphosphate, and phosphatidylinositol 3,4, 5-trisphosphate. Although studied extensively, a demonstrably full-length cDNA encoding 5-phosphatase II has yet to be isolated. In this study we used a human partial 2.3-kilobase pair (kb) cDNA to screen mouse brain and kidney cDNA libraries, resulting in the isolation of a 3.7-kb cDNA (M5), which by multiple criteria represents a full-length cDNA encoding a 115-kDa 5-phosphatase II. We also isolated a smaller cDNA (M22) with a unique N terminus that encodes a 104-kDa polypeptide. Analysis of these cDNAs suggests a further 87-kDa isoform may arise from differential splicing resulting in translation at methionine 234 in M5. RNA analysis of tissues demonstrates expression of two mRNA species of approximately 4.0 or 3.0 kb, respectively. Probes unique to the 5' end of M5 or M22 hybridized to the 4.0- or 3.0-kb transcripts, respectively. RNA analysis using probes derived from sequence 3' to the potential splice site in M5 and M22 hybridized to both transcripts. Expression of the recombinant 115-kDa protein, or a smaller recombinant protein lacking the N terminus transiently in COS-7 cells, showed localization of enzyme activity to the membrane. Removal of the C-terminal CAAX motif resulted in a significant translocation of the protein lacking the N terminus but not the 115-kDa 5-phosphatase to the cytosol. Western blot analysis of membrane and cytosolic fractions of multiple mouse tissues confirmed the 115-kDa 5-phosphatase II was located in the membrane, whereas the 104- and 87-kDa isoforms were prominent in the cytosol. Collectively these studies demonstrate the widespread expression of at least three isoforms of 5-phosphatase II derived from RNA splicing events. This allows differential distribution of the 5-phosphatase II activity between the membrane and cytosol of the cell and thereby may regulate enzyme access to phosphoinositide-derived signaling molecules.