Located at the inner leaflet of the plasma membrane (PM), phosphatidyl-inositol 4,5-bisphosphate [PI(4,5)P2] composes only 1-2 mol% of total PM lipids. With its synthesis and turnover both spatially and temporally regulated, PI(4,5)P2 recruits and interacts with hundreds of cellular proteins to support a broad spectrum of cellular functions. Several factors contribute to the versatile and dynamic distribution of PI(4,5)P2 in membranes. Physiological multivalent cations such as Ca2+ and Mg2+ can bridge between PI(4,5)P2 headgroups, forming nanoscopic PI(4,5)P2-cation clusters. The distinct lipid environment surrounding PI(4,5)P2 affects the degree of PI(4,5)P2 clustering. In addition, diverse cellular proteins interacting with PI(4,5)P2 can further regulate PI(4,5)P2 lateral distribution and accessibility. This review summarizes the current understanding of PI(4,5)P2 behavior in both cells and model membranes, with emphasis on both multivalent cation- and protein-induced PI(4,5)P2 clustering. Understanding the nature of spatially separated pools of PI(4,5)P2 is fundamental to cell biology.