Biochemical abnormalities associated with the development of multiple myeloma have been difficult to define especially in terms of demonstrating an in vivo effect of suspected lesions. Herein, we have identified such a defect associated with lack of expression of PTEN, a cellular phosphatase involved in the regulation of phosphatidylinositol phosphates (PIP's). In myeloma cells, PIP's are required for phosphorylation of Akt, a key event leading to inhibition of apoptosis. Loss of PTEN results in a failure to de-phosphorylate PIP's and a corresponding increase in Akt phosphorylation. OPM-2 cells lacking PTEN expression have the highest level of Akt phosphorylation of eight lines examined. Loss of PTEN was found to be associated with a 630 bp deletion corresponding to amino acids 56 - 267. Ectopic expression of wild type PTEN in OPM-2 cells inhibited Akt phosphorylation which was correlated with an increase in apoptosis. The in vivo relevance of loss of PTEN expression was demonstrated by injecting control and wild type PTEN transfected OPM-2 cells into SCID mice. Tumors arose at an incidence of 100% in controls, but only 50% (and of smaller size and longer latency) in low PTEN expressing clones. Importantly, clones expressing high levels of PTEN failed to produce tumors even at five times the latency period of controls. These results demonstrate that PTEN deletion/mutation is responsible for in vivo growth of this tumor and suggests that PTEN regulation may play an important role in tumor development in a subset of multiple myeloma patients. Oncogene (2000) 19, 4091 - 4095