The initiating events associated with T activation in response to stimulation of the T cell antigen receptor (TCR) and costimulatory receptors, such as CD28, are intimately associated with the enzymatically catalyzed addition of phosphate not only to key tyrosine, threonine and serine residues in proteins but also to the D3 position of the myo-inositol ring of phosphatidylinositol (PtdIns). This latter event is catalyzed by the lipid kinase phosphoinositide 3-kinase (PI3K). The consequent production of PtdIns(3,4)P2 and PtdIns(3,4,5)P3 serves both to recruit signaling proteins to the plasma membrane and to induce activating conformational changes in proteins that contain specialized domains for the binding of these phospholipids. The TCR signaling proteins that are subject to regulation by PI3K include Akt, phospholipase Cgamma1 (PLCgamma1), protein kinase C zeta (PKC-zeta), Itk, Tec and Vav, all of which play critical roles in T cell activation. As is the case for phosphorylation of protein substrates, the phosphorylation of PtdIns is under dynamic regulation, with the D3 phosphate being subject to hydrolysis by the 3-phosphatase PTEN (phosphatase and tensin homolog deleted on chromosome 10), thereby placing PTEN in direct opposition to PI3K. In this review we consider recent data concerning how PTEN may act in regulating the process of T cell activation.