Sonic hedgehog (SHH) medulloblastoma (MB) subtype is driven by a proliferative CD15+ tumor propagating cell (TPC), also considered in the literature as a putative cancer stem cell (CSC). Despite considerable research, much of the biology of this TPC remains unknown. We report evidence that phosphatase and tensin homolog (PTEN) and phosphoinositide 3-kinase (PI-3K) play a crucial role in the propagation, survival and potential response to therapy in this CD15+ CSC/TPC-driven malignant disease. Using the ND2-SmoA1 transgenic mouse model for MB, mouse genetics and patient-derived xenografts (PDXs), we demonstrate that the CD15+TPCs are 1) obligately required for SmoA1Tg-driven tumorigenicity 2) regulated by PTEN and PI-3K signaling 3) selectively sensitive to the cytotoxic effects of pan PI-3K inhibitors in vitro and in vivo but resistant to chemotherapy 4) in the SmoA1Tg mouse model are genomically similar to the SHH human MB subgroup. The results provide the first evidence that PTEN plays a role in MB TPC signaling and biology and that PI-3K inhibitors target and suppress the survival and proliferation of cells within the mouse and human CD15+ cancer stem cell compartment. In contrast, CD15+ TPCs are resistant to cisplatinum, temozolomide and the SHH inhibitor, NVP-LDE-225, agents currently used in treatment of medulloblastoma. These studies validate the therapeutic efficacy of pan PI-3K inhibitors in the treatment of CD15+ TPC dependent medulloblastoma and suggest a sequential combination of PI-3K inhibitors and chemotherapy will have augmented efficacy in the treatment of this disease.