Inactivating mutations in the PTEN tumor suppressor gene occur in approximately 30-50% of endometrial carcinomas. PTEN is a phosphatase that negatively regulates the phosphoinositide 3-kinase signaling pathway, including the downstream effector AKT. To evaluate the role of PTEN in endometrial growth regulation, we expressed wild-type or mutant PTEN in endometrial carcinoma cell lines. As expected, expression of exogenous PTEN decreased levels of activated AKT in all cell lines examined. However, PTEN induced a G(1) cell cycle arrest specifically in endometrial carcinoma cells that lack endogenous wild-type PTEN. Growth of cells containing wild-type PTEN was unaffected by exogenous PTEN expression. Growth arrest required a functional phosphatase domain but not the PDZ interaction motif of PTEN. Overall levels of CIP/KIP and INK4 family members, the known inhibitory regulators of the G(1) phase of the cell cycle, were unchanged. However, PTEN induced a specific reduction of cyclin D3 levels and an associated increase in the amount of the inhibitor p27(KIP1) complexed with CDK2. Enforced expression of cyclin D3 abrogated the PTEN-induced cell cycle arrest. Although PTEN signaling directly regulates p27(KIP1) levels in some settings, in endometrial carcinoma cells, PTEN expression indirectly regulated p27(KIP1) activity by modulating levels of cyclin D3. These data support multiple mechanisms of PTEN-induced cell cycle arrest.