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Pontocerebellar hypoplasia (PCH) is a group of neurological disorders that affect the development of the brain, in particular, the pons and cerebellum. Homozygous mutations of TBC1D23 have been found recently to lead to PCH; however, the underlying molecular mechanisms remain unclear. Here, we show that the crystal structure of the TBC1D23 C-terminal domain adopts a Pleckstrin homology domain fold and selectively binds to phosphoinositides, in particular, PtdIns(4)P, through one surface while binding FAM21 via the opposite surface. Mutation of key residues of TBC1D23 or FAM21 selectively disrupts the endosomal vesicular trafficking toward the Trans-Golgi Network. Finally, using the zebrafish model, we show that PCH patient-derived mutants, impacting either phosphoinositide binding or FAM21 binding, lead to abnormal neuronal growth and brain development. Taken together, our data provide a molecular basis for the interaction between TBC1D23 and FAM21, and suggest a plausible role for PtdIns(4)P in the TBC1D23-mediating endosome-to-TGN trafficking pathway. Defects in this trafficking pathway are, at least partially, responsible for the pathogenesis of certain types of PCH. [ABSTRACT FROM AUTHOR]