Hydrolyzes phosphatidylinositol 4,5-bisphosphate (PtIns(4,5)P2) and the signaling molecule phosphatidylinositol 1,4,5-trisphosphate (PtIns(1,4,5)P3), and thereby modulates cellular signaling events. a 1,2-diacyl-sn-glycero-3-phospho-(1D-myo-inositol-4,5-bisphosphate) + H2O = a 1,2-diacyl-sn-glycero-3-phospho-(1D-myo-inositol 4-phosphate) + phosphate Interacts with APPL1, PHETA1 and PHETA2. Interacts with several Rab GTPases, at least RAB1A, RAB2A, RAB5A, RAB6A, RAB8A, RAB9A and RAB33B; these interactions may play a dual role in targeting INPP5B to the specific membranes and stimulating its phosphatase activity. Interacts preferentially with non-phosphorylated RAB8A; phosphoryation of RAB8A on 'Thr-72' disrupts this interaction (By similarity). Interacts with INPP5F (PubMed:25869668). Detected in kidney, liver, brain, lung and testis (at protein level). Detected in kidney and liver, and at lower levels in brain, lung and testis. The ASH (ASPM-SPD2-Hydin) and RhoGAP (Rho GTPase activating) domains form a single folding module. The ASH domain has an immunoglobulin-like fold, the Rho-GAP domain lacks the catalytic arginine and is catalytically inactive. The ASH-RhoGAP module regulates the majority of the protein-protein interactions currently described. The ASH domain mediates association with membrane-targeting Rab GTPases. The Rho-GAP domain interacts with the endocytic adapter APPL1, which is then displaced by PHETA1 and PHETA2 as endosomes mature, all three interactions rely on F&H motifs, an approximately 12-13 amino-acid sequence centered around Phe and His residues essential for binding (By similarity). Isoprenylation at Cys-990 may be required for localization at the membrane. May be proteolytically cleaved after Lys-320 as inferred from N-terminal protein sequence of the 75 kda form. Belongs to the inositol 1,4,5-trisphosphate 5-phosphatase type II family. Truncated N-terminus.