The tumor suppressor phosphatase and tensin homolog deleted on chromosome 10 (PTEN) has a well-characterized lipid phosphatase activity and a poorly characterized protein phosphatase activity. We show that both activities are required for PTEN to inhibit cellular invasion and to mediate most of its largest effects on gene expression. PTEN appears to dephosphorylate itself at threonine 366, and mutation of this site makes lipid phosphatase activity sufficient for PTEN to inhibit invasion. We propose that the dominant role for PTEN's protein phosphatase activity is autodephosphorylation-mediated regulation of its lipid phosphatase activity. Because PTEN's regulation of invasion and these changes in gene expression required lipid phosphatase a...