Phosphatidylinositol 4,5‐bisphosphate (PtdIns(4,5)P₂) is a key component in signal transduction, being a precursor to other signalling molecules and itself associated with roles in signal transduction and cell biology. Tubby is a membrane bound transcription factor whose dysfunction results in obesity in mice. It contains a domain that selectively binds PtdIns(4,5)P₂. We have investigated the use of a fluorescently tagged version of this domain to monitor changes in PtdIns(4,5)P₂ concentration in living cells and compared it to the pleckstrin homology domain of PLCδ1. Our results show that selected mutants of this domain report receptor‐mediated changes in cellular PtdIns(4,5)P₂. In contrast to the pleckstrin homology domain of PLCδ1 it does not have a significant affinity for inositol 1,4,5‐trisphosphate (IP₃). Using a selected mutant, we examine the regulation of ATP‐sensitive K⁺ channels via a G_q/11‐coupled receptor. These experiments reveal a correlation between reporter translocation and the onset of current inhibition whilst the recovery of current after agonist removal is delayed when compared to the reporter. Furthermore our studies reveal the importance of Ca²⁺ in determining the overall activity of phospholipase C in living cells. This probe may be valuable in examining changes in PtdIns(4,5)P₂ distinct from those of IP₃ in intact cells in a variety of physiological settings.