PTEN is a well-defined tumor suppressor gene that antagonizes the PI3K/Akt pathway to regulate a multitude of cellular processes, such as survival, growth, motility, invasiveness, and angiogenesis. While the functions of PTEN have been studied extensively, the regulation of its activity during normal and disease conditions still remains incompletely understood. In this study, we identified the protein phosphatase-1 nuclear targeting subunit PNUTS (PPP1R10) as a PTEN-associated protein. PNUTS directly interacted with the lipid-binding domain (C2 domain) of PTEN and sequestered it in the nucleus. Depletion of PNUTS leads to increased apoptosis and reduced cellular proliferation in a PTEN-dependent manner. PNUTS expression was elevated in certain cancers compared with matched normal tissues. Collectively, our studies reveal PNUTS as a novel PTEN regulator and a likely oncogene.