Phosphoinositide 3-kinase C2alpha (PI3K-C2alpha) is a member of the class II PI-3 kinases, defined by the presence of a second C2 domain at their C termini. The cellular functions of the class II enzymes are incompletely understood, though they have been implicated in receptor activation pathways initiated by epidermal growth factor, insulin, and chemokines. PI3K-C2alpha was recently found to be localized to clathrin-coated membranes in the trans-Golgi network and at endocytic sites on the plasma membrane. Further, a specific binding site was identified for clathrin on the N terminus of PI3K-C2alpha, whose occupancy resulted in lipid kinase activation. Expression of PI3K-C2alpha in cells dramatically affected clathrin distribution and function in cells, leading to accumulation of intracellular clathrin-coated structures, which are visualized here at the ultrastructural level, and inhibition of clathrin-mediated transport from both the plasma membrane and the trans-Golgi network. In this study we have demonstrated that the isolated clathrin binding domain of PI3K-C2alpha can drive clathrin lattice assembly and that both it and the lipid kinase activity of the protein can independently modulate clathrin distribution and function when expressed in cells. Together, these results suggest that PI3K-C2alpha employs both protein-protein interaction and localized production of 3-phosphoinositides to affect clathrin dynamics at sites of membrane budding and targeting.