PTEN, a tumor suppressor phosphatase, is important in the regulation of cell migration and invasion. Physiological regulation of PTEN (phosphatase and tensin homolog deleted on chromosome 10) by cell surface receptors has not been described. Here, we show that the bioactive lipid sphingosine 1-phosphate (S1P), which acts through the S1P2 receptor (S1P2R) G protein-coupled receptor (GPCR) to inhibit cell migration, utilizes PTEN as a signaling intermediate. S1P2R inhibition of cell migration is abrogated by dominant-negative PTEN expression. S1P was unable to efficiently inhibit the migration of Pten(DeltaloxP/DeltaloxP) mouse embryonic fibroblasts; however, the antimigratory effect was restored upon the expression of PTEN. S1P2R activation of Rho GTPase is not affected in Pten(DeltaloxP/DeltaloxP) cells, and dominant-negative Rho GTPase reversed S1P inhibition of cell migration in WT cells but not in Pten(DeltaloxP/DeltaloxP) cells, suggesting that PTEN acts downstream of the Rho GTPase. Ligand activation of the S1P2R receptor stimulated the coimmunoprecipitation of S1P2R and PTEN. Interestingly, S1P2R signaling increased PTEN phosphatase activity in membrane fractions. Furthermore, tyrosine phosphorylation of PTEN was stimulated by S1P2R signaling. These data suggest that the S1P2R receptor actively regulates the PTEN phosphatase by a Rho GTPase-dependent pathway to inhibit cell migration. GPCR regulation of PTEN maybe a general mechanism in signaling events of cell migration and invasion.