DOCK8 is a Cdc42-specific guanine-nucleotide exchange factor that is essential for development and functions of various subsets of leukocytes in innate and acquired immune responses. Although DOCK8 plays a critical role in spatial control of Cdc42 activity during interstitial leukocyte migration, the mechanism remains unclear. We show that the DOCK homology region (DHR)-1 domain of DOCK8 binds specifically to phosphatidylinositol 4,5-bisphosphate (PI(4,5)P2) and is required for its recruitment to the plasma membrane. Structural and biochemical analyses reveal that DOCK8 DHR-1 domain consists of a C2 domain-like core with loops creating the upper surface pocket, where three basic residues are located for stereospecific recognition of phosphoinositides. Substitution of the two basic residues, K576 and R581, with alanine abolished PI(4,5)P2 binding in vitro, ablated the ability of DOCK8 to activate Cdc42 and support leukocyte migration in three-dimensional collagen gels. Dendritic cells carrying the mutation exhibited defective interstitial migration in vivo. Thus, our study uncovers a critical role of DOCK8 in coupling PI(4,5)P2 signaling with Cdc42 activation for immune regulation.