Significance: Reactive oxygen species, produced by the phagosomal NADPH oxidase of neutrophils, play a significant physiological role during normal defense. Their role is not only to kill invading pathogens, but also to act as modulators of global physiological functions of phagosomes. Given the importance of NADPH oxidase in the immune system, its activity has to be decisively controlled by distinctive mechanisms to ensure appropriate regulation at the phagosome. Recent Advances: Here, we describe the signal transduction pathways that regulate phagosomal NADPH oxidase in neutrophils, with an emphasis on the role of lipid metabolism and intracellular Ca(2+) mobilization. Critical Issues: The potential involvement of Ca(2+)-binding S100A8 and S100A9 proteins, known to interact with the plasma membrane NADPH oxidase, is also considered. Future Directions: Recent technical progress in advanced live imaging microscopy will permit to focus more accurately on phagosomal rather than plasma membrane NADPH oxidase regulation during neutrophil phagocytosis.