Germline pathogenic phosphatase and tensin homolog (PTEN) mutations cause PTEN hamartoma tumor syndrome (PHTS), characterized by various benign and malignant tumors of the thyroid, breast, endometrium, and other organs. Patients with PHTS may present with other clinical features such as macrocephaly, intestinal polyposis, cognitive changes, and pathognomonic skin changes. Clinically, deregulation of PTEN function is implicated in other human diseases in addition to many types of human cancer. PTEN is an important phosphatase that counteracts one of the most critical cancer pathways: the phosphatidylinositol 3-kinase (PI3K)/AKT signaling pathways. Although PTEN can dephosphorylate lipids and proteins, it also has functions independent of phosphatase activity in normal and pathological states. It is positively and negatively regulated at the transcriptional level as well as posttranslationally by phosphorylation, ubiquitylation, oxidation, and acetylation. Although most of its tumor-suppressor activity is likely to be caused by lipid dephosphorylation at the plasma membrane, PTEN also resides in the cytoplasm and nucleus, and its subcellular distribution is under strict control. In this review, we highlight our current knowledge of PTEN function and recent discoveries in understanding PTEN function regulation and how this can be exploited therapeutically for cancer treatment.