The role of tumor suppressor haploinsufficiency in oncogenesis is still poorly understood. The PTEN and TSC2 tumor suppressors function to antagonize mTOR (mammalian target of rapamycin) activation by Akt; hence, compound heterozygous inactivation of Pten and Tsc2 in the mouse may in principle exacerbate the tumor phenotypes observed in the single mutants in a reciprocal manner. In contrast, we found that while Tsc2 heterozygosity unmasks Pten haploinsufficiency in growth and tumor suppression, tumorigenesis in Tsc2+/- mutants is surprisingly not accelerated by Pten heterozygosity, even though mTOR activation is cooperatively enhanced by compound Pten/Tsc2 heterozygosity. We show that the wild-type alleles of both Pten and Tsc2 are retained in prostate tumors from both Pten+/- and Pten+/-Tsc2+/- mice, whereas TSC-related tumor lesions are invariably associated with Tsc2 loss of heterozygosity (LOH) in both Tsc2+/- and Pten+/-Tsc2+/- mice. These findings demonstrate that inactivation of TSC2 is epistatic to PTEN in the control of tumor initiation and progression and, importantly, that both Pten and Tsc2 are haploinsufficient for suppression of tumorigenesis initiated by Pten heterozygosity, while neither Pten nor Tsc2 is haploinsufficient for repression of carcinogenesis arising from Tsc2 heterozygosity, providing a rationale for the differential cancer susceptibility of the two human conditions associated with PTEN or TSC2 heterozygous mutations.