PTEN (phosphatase and tensin homologue) is a phosphatase that dephosphorylates both protein and phosphoinositide substrates. It is mutated in a variety of human tumours and has important roles in a diverse range of biological processes, including cell migration and chemotaxis. PTEN's intracellular localization and presumably activity are regulated by chemoattractants in Dictyostelium and mouse neutrophils. However, the mechanisms for its regulation remain elusive. Here we show that RhoA and Cdc42, members of the Rho family of small GTPases, regulate the intracellular localization of PTEN in leukocytes and human transfected embryonic kidney cells. In addition, active RhoA is able to stimulate the phospholipid phosphatase activity of PTEN in human embryonic kidney cells and leukocytes, and this regulation seems to require RhoA's downstream effector, RhoA-associated kinase (Rock). Furthermore, we have identified key residues on PTEN that are required for its regulation by the small GTPase, and show that small GTPase-mediated regulation of PTEN has a significant role in the regulation of chemotaxis.