PTEN is a tumor suppressor with sequence homology to protein tyrosine phosphatases and the cytoskeletal protein tensin. mPTEN-mutant mouse embryos display regions of increased proliferation. In contrast, mPTEN-deficient immortalized mouse embryonic fibroblasts exhibit decreased sensitivity to cell death in response to a number of apoptotic stimuli, accompanied by constitutively elevated activity and phosphorylation of protein kinase B/Akt, a crucial regulator of cell survival. Expression of exogenous PTEN in mutant cells restores both their sensitivity to agonist-induced apoptosis and normal pattern of PKB/Akt phosphorylation. Furthermore, PTEN negatively regulates intracellular levels of phosphatidylinositol (3,4,5) trisphosphate in cells and dephosphorylates it in vitro. Our results show that PTEN may exert its role as a tumor suppressor by negatively regulating the PI3'K/PKB/Akt signaling pathway.