The PTEN tumour suppressor protein is a phosphoinositide 3-phosphatase that, by metabolising phosphatidylinositol 3,4,5-trisphosphate (PtdIns(3,4,5)P(3)), acts in direct antagonism to growth factor stimulated PI 3-kinases. A wealth of data has now illuminated pathways that can be controlled by PTEN through PtdIns(3,4,5)P(3), some of which, when deregulated, give a selective advantage to tumour cells. Early studies of PTEN showed that its activity was able to promote cell cycle arrest and apoptosis and inhibit cell motility, but more recent data have identified other functional consequences of PTEN action, such as effects on the regulation of angiogenesis. The structure of PTEN includes several features not seen in related protein phosphatases, which adapt the enzyme to act efficiently as a lipid phosphatase, including a C2 domain tightly associated with the phosphatase domain, and a broader and deeper active site pocket. Several pieces of data indicate that PTEN is a principal regulator of the cellular levels of PtdIns(3,4,5)P(3), but work is only just beginning to uncover mechanisms by which the cellular activity of PTEN can be controlled. There also remains the vexing question of whether any of PTEN's cellular functions reflect its evolutionary roots as a member of the protein tyrosine phosphatase superfamily.