The tumor suppressor phosphatase and tensin homolog deleted on chromosome 10 (PTEN) is a phosphatidylinositol (PtdIns) phosphatase that regulates Akt activation via PtdIns 3 kinase. Changes in PTEN expression and/or activity have been identified in a variety of chronic hepatocellular disorders including obesity, NAFLD, NASH, and alcoholism. In cancer biology, PTEN is frequently mutated or deleted in a wide variety of tumors. Mutations, decreased promoter activity, and decreased expression in PTEN are frequently identified in patients with hepatocellular carcinoma. While the majority of research on PTEN concerns obesity and NASH, PTEN clearly has a role in hepatic insulin sensitivity and in the development of steatosis during chronic alcoholism. Yet, in chronic alcoholics and HCC, very little is known concerning PTEN mutation/deletion or low PTEN expression. This review is focused on an overview of the current knowledge on molecular mechanisms of dysregulation of PTEN expression/activity in the liver and their relationship to development of ethanol-induced hepatocellular damage and cancer.