The PTEN/MMAC1/TEP (PTEN) tumor suppressor gene at 10q23.3 is mutated in multiple types of sporadic tumors including breast cancers and also in the germline of patients with the Cowden's breast cancer predisposition syndrome. The PTEN gene encodes a multifunctional phosphatase capable of dephosphorylating the same sites in membrane phosphatidylinositols phosphorylated by phosphatidylinositol 3'-kinase (PI3K). We demonstrate herein that loss of PTEN function in breast cancer cells results in an increase in basal levels of phosphorylation of multiple components of the P13K signaling cascade as well as an increase in duration of ligand-induced signaling through the P13K cascade. These alterations are reversed by wild-type but not phosphatase inactive PTEN. In the presence of high concentrations of serum, enforced expression of PTEN induces a predominant G1 arrest consistent with the capacity of PTEN to evoke increases in the expression of the p27Kip1 cyclin dependent kinase inhibitor. In the presence of low concentrations of serum, enforced PTEN expression results in a marked increase in cellular apoptosis, a finding which is consistent with the capacity of PTEN to alter the phosphorylation, and presumably function, of the AKT, BAD, p70S6 kinase and GSK3 alpha apoptosis regulators. Under anchorage-independent conditions, PTEN also induces anoikis, a form of apoptosis that occurs when cells are dissociated from the extracellular matrix, which is enhanced in conjunction with low serum culture conditions. Together, these data suggest that PTEN effects on the PI3K signaling cascade are influenced by the cell stimulatory context, and that depending on the exposure to growth factors and other exogenous stimuli such as integrin ligation, PTEN can induce cell cycle arrest, apoptosis or anoikis in breast cancer cells.