MMAC1, also known as PTEN or TEP-1, was recently identified as a gene commonly mutated in a variety of human neoplasias. Sequence analysis revealed that MMAC1 harbored sequences similar to those found in several protein phosphatases. Subsequent studies demonstrated that MMAC1 possessed in vitro enzymatic activity similar to that exhibited by dual specificity phosphatases. To characterize the potential cellular functions of MMAC1, we expressed wild-type and several mutant variants of MMAC1 in the human glioma cell line, U373, that lacks endogenous expression. While expression of wild-type MMAC1 in these cells significantly reduced their growth rate and saturation density, expression of enzymatically inactive MMAC1 significantly enhanced growth in soft agar. Our observations indicate that while wild-type MMAC1 exhibits activities compatible with its proposed role as a tumor suppressor, cellular expression of MMAC1 containing mutations in the catalytic domain may yield protein products that enhance transformation characteristics.