Regulation of membrane trafficking requires the concerted actions of rab proteins and their effectors. Effectors that modulate the dynamic remodeling of membrane domains such as phosphatidylinositol (PI) 3’-kinases and phosphatases are of significant interest due to their regulatory roles in membrane trafficking and import in human diseases such as Marie Charcot Tooth syndrome and X-linked muscular dystrophy. Rab7 is required for late endosomal transport with the PI 3’-kinase hVPS34 and its adaptor protein p150 serving as crucial rab7 effectors. The hVPS34/p150 complex colocalizes with rab7 on late endosomes where activation of the hVPS34 depends on the presence of active rab7. To examine the downstream roles of late endosomal PI 3’-phosphate we analyzed the association of the PI 3’-phosphatase, myotubularin (MTM1), with rab7 and hVPS34 on late endosomes. MTM1 was detected on both early and late endosomes, where it was complexed with p150/hVPS34. The interaction between MTM1 and the PI 3’-kinase complex was found mediated by the WD40 domain of p150. Since the p150 WD40 domain is also the binding site for rab5 and rab7, the interactions of the rabGTPases and MTM1 with the p150/hVPS34 lipid kinase complex are probably mutually exclusive. MTM1 activity could be shown to be a negative regulator of early and late endosomal fusion events, while rab5 and rab7 are activators of endosomal fusion events. Therefore, the equilibrium between the rab/lipid kinase and the MTM1/lipid kinase complexes is most likely an important determinant of both endosomal phophatidylinositol lipid and endosome dynamics. Furthermore, our cumulative data identify rab7 as a key upstream regulator in the dynamics of late endosomal lipid microdomains known to be involved in multivesicular body formation and protein sorting.