The tumor suppressor PTEN, a critical regulator for multiple cellular processes, is mutated or deleted frequently in various human cancers. Subtle reductions in PTEN expression levels have profound impacts on carcinogenesis. Here we show that PTEN level is regulated by ubiquitin-mediated proteasomal degradation, and purified its ubiquitin ligase as HECT-domain protein NEDD4-1. In cells NEDD4-1 negatively regulates PTEN stability by catalyzing PTEN polyubiquitination. Consistent with the tumor-suppressive role of PTEN, overexpression of NEDD4-1 potentiated cellular transformation. Strikingly, in a mouse cancer model and multiple human cancer samples where the genetic background of PTEN was normal but its protein levels were low, NEDD4-1 was highly expressed, suggesting that aberrant upregulation of NEDD4-1 can posttranslationally suppress PTEN in cancers. Elimination of NEDD4-1 expression inhibited xenotransplanted tumor growth in a PTEN-dependent manner. Therefore, NEDD4-1 is a potential proto-oncogene that negatively regulates PTEN via ubiquitination, a paradigm analogous to that of Mdm2 and p53.