The tumor suppressor phosphatase and tensin homologue deleted on chromosome 10, PTEN is a key enzyme involved in the regulation of several biological processes including cell growth, proliferation, and death. Alterations in PTEN are tightly associated to a number of human diseases including cancer. Functionally, PTEN is a phosphatase with activity towards lipid and protein substrates. The lipid phosphatase activity of PTEN has been well characterized and is undoubtedly linked to dephosphorylation of the second messenger phosphatidyl-inositol-3,4,5 trisphosphate (PIP3) and is commonly associated with inhibition of the pro-survival PI3K/AKT signal transduction pathway. In contrast, the phosphatase activity of PTEN towards protein substrates remains poorly understood and its biological role undefined. Using knock-in (KI) mice harbouring cancer-associated and functionally relevant PTEN missense mutations, we now show that loss of Pten lipid-phosphatase function cooperates with oncogenic PI3K to promote rapid mammary tumorigenesis. Surprisingly, additional loss of Pten protein-phosphatase activity triggered an extensive cell death response which manifested in early and advanced mammary tumours. Proteomic and transcriptomic analyses identified key molecular signatures activated upon loss of PTEN protein-phosphatase function able to restrain tumor cell survival. Altogether, our studies provide new insights into mechanisms of PTEN-dependent tumour suppression and have important therapeutic implications for a range of clinical conditions.