The PTEN gene is an important tumor suppressor mutated in a number of cancers. To date, its growth regulatory properties have been intimately linked to its ability to act as a protein and phosphoinositol phosphatase. Inactivation of the enzymatic activity of PTEN is primarily due to direct mutation of its amino-terminal catalytic domain but approximately 20% of mutations are in the carboxy-terminus, which regulates membrane localization, protein stability, cellular migration and p53 function. We identified a novel protein that interacts with this domain, the v-jun transcriptional target, MSP58. Binding of MSP58 to PTEN results in the suppression of MSP58-mediated transformation. However, this PTEN effect does not require its catalytic activity, suggesting additional mechanisms of PTEN action.