Synaptojanin is a phosphatidylinositol-4 and 5-phosphatase found in synaptic regions. Because synaptojanin binds to proteins required for endocytosis, it has been proposed to function in synaptic vesicle recycling. The C. elegans synaptic function mutant, unc-26, encodes a homolog of the vertebrate synaptojanin protein. We have tested the hypothesis that synaptojanin functions in synaptic vesicle recycling by characterizing the synaptic ultrastructure of unc-26 mutants. First, mutants show a significant depletion in the number of synaptic vesicles at the synapse, indicating a disruption in the recovery of vesicles from the plasma membrane. Second, intermediate endocytic structures accumulate in the plasma membrane near synapses. Third, coated vesicles accumulate in the cytoplasm near synapses, indicating that shedding of the clathrin coat following fission of the vesicle from the membrane requires synaptojanin activity. Finally, endosomal compartments accumulate and enlarge, implicating a role for synaptojanin in the budding of vesicles from the endosome. We conclude from these results that synaptojanin facilitates multiple steps in synaptic vesicle endocytosis, specifically in the endocytosis of plasma membrane and the uncoating of vesicles after fission. We also find pleiotropic defects in the organization of the cytoskeleton and in vesicle transport from the cell body and from Golgi stacks. These defects are not readily reconciled with our current understanding of synaptojanin function, but suggest that the phospholipid composition of membranes plays a critical role in the regulation of these processes and structures.