The recently discovered tumor suppressor gene PTEN has been found mutated in many types of advanced tumors. When introduced into tumor cells that lack the wild-type allele of the gene, PTEN was able to suppress the growth of these cells. Here, we have analyzed how PTEN might alter cell cycle-regulatory controls to achieve this growth-inhibitory effect. We found that overexpression of PTEN stimulates the synthesis of three inhibitors of cyclin-dependent kinases, p21WAF1, p27KIP1, and p57KIP2. This effect is very specific, as the expression of other components of the cell cycle engine, various cyclins and cyclin-dependent kinases, is not affected. For p21WAF1 we show that this induction is due to the p53-independent transcriptional activation of its promoter. In addition, increased expression of PTEN rendered the cells more sensitive to apoptotic cell death. Therefore, our data suggest a two-fold mechanism of growth inhibition by PTEN: one that acts via the increased expression of CKIs such as p21WAF1, and another that augments the cellular propensity for apoptotic cell death.