We show, for the first time, that the tumor suppressor PTEN can have tumor-promoting properties. We show that PTEN acquires these unexpected properties by enhancing gain-of-function mutant p53 (mut-p53) protein levels. We find that PTEN restoration to cells harboring mut-p53 leads to induction of G(1)-S cell cycle progression and cell proliferation and to inhibition of cell death. Conversely, PTEN inhibition in cells expressing wild-type PTEN and mut-p53 leads to inhibition of cell proliferation and inhibition of in vivo tumor growth. We show the dependency of the tumor-promoting effects of PTEN on mut-p53 by showing that knockdown of mut-p53 expression inhibits or reverses the tumor-promoting effects of PTEN. Mechanistically, we show that PTEN expression enhances mut-p53 protein levels via inhibition of mut-p53 degradation by Mdm2 and possibly also via direct protein binding. These findings describe a novel function of PTEN and have important implications for experimental and therapeutic strategies that aim at manipulating PTEN or p53 in human tumors. They suggest that the mutational status of PTEN and p53 should be considered to achieve favorable therapeutic outcomes. The findings also provide an explanation for the low frequency of simultaneous mutations of PTEN and p53 in human cancer.