Deregulation of the phosphatidylinositol 3-kinase (PI3K) pathway either through loss of PTEN or mutation of the catalytic subunit alpha of PI3K (PIK3CA) occurs frequently in human cancer. We identified PIK3CA mutations in 26% of 342 human breast tumor samples and cell lines at about equal frequency in tumor stages I to IV. To investigate the relationship between PTEN and PIK3CA, we generated a cohort of tumors that had lost PTEN expression and compared it with a matched control set that had retained PTEN. A highly significant association between PIK3CA mutations and retention of PTEN protein expression was observed. In addition, PIK3CA mutations were associated with expression of estrogen and progesterone receptors (ER/PR), lymph node metastasis, and ERBB2 overexpression. The fact that PIK3CA mutations and PTEN loss are nearly mutually exclusive implies that deregulated phosphatidylinositol-3,4,5-triphosphate (PIP(3)) is critical for tumorigenesis in a significant fraction of breast cancers and that loss of PIP(3) homeostasis by abrogation of either PIK3CA or PTEN relieves selective pressure for targeting of the other gene. The correlation of PIK3CA mutation to ER/PR-positive tumors and PTEN loss to ER/PR-negative tumors argues for disparate branches of tumor evolution. Furthermore, the association between ERBB2 overexpression and PIK3CA mutation implies that more than one input activating the PI3K/AKT pathway may be required to overcome intact PTEN. Thus, mutation of PIK3CA is frequent, occurs early in carcinoma development, and has prognostic and therapeutic implications.