The plant vascular network consists of specialized phloem and xylem elements that undergo two distinct morphogenetic developmental programs to become transport-functional units. Whereas vacuolar rupture is a determinant step in protoxylem differentiation, protophloem elements never form a big central vacuole. Here, we show that a genetic disturbance of phosphatidylinositol 4,5-bis-phosphate [PtdIns(4,5)P2] homeostasis rewires cell trafficking towards the vacuole in Arabidopsis thaliana roots. Consequently, an enhanced phosphoinositide-mediated vacuolar biogenesis correlates with premature programmed cell death (PCD) and secondary cell wall elaboration in xylem cells. By contrast, vacuolar fusion events in protophloem cells trigger the abnormal formation of big vacuoles, preventing cell clearance and tissue functionality. Removal of the inositol 5' phosphatase COTYLEDON VASCULAR PATTERN 2 from the plasma membrane (PM) by brefeldin A (BFA) treatment increases PtdIns(4,5)P2 content at the PM and disrupts protophloem continuity. Conversely, BFA application abolishes vacuolar fusion events in xylem tissue without preventing PCD, suggesting the existence of additional PtdIns(4,5)P2-dependent cell death mechanisms. Overall, our data indicate that tight PM phosphoinositide homeostasis is required to modulate intracellular trafficking contributing to oppositely regulate vascular differentiation.