Loss of function at the Pten tumor-suppressor locus is a common genetic modification found in human prostate cancer. While recent in vivo and in vitro data support an important role of aberrant ErbB-2 signaling to clinically relevant prostate target genes, such as cyclin D1, the role of Pten in ErbB-2-induced prostate epithelial proliferation is not well understood. In the Pten-deficient prostate cancer cell line, LNCaP, restoration of Pten was able to inhibit ErbB-2- and heregulin-induced cell cycle progression, as well as cyclin D1 protein levels and promoter activity. Previously, we established that probasin-driven ErbB-2 transgenic mice presented with high-grade prostate intraepithelial neoplasia and increased nuclear cyclin D1 levels. We show that mono-allelic loss of pten in the probasin-driven-ErbB-2 model resulted in increased nuclear cyclin D1 and proliferating cell nuclear antigen levels and decreased disease latency compared to either individual genetic model and, unlike the probasin-driven-ErbB-2 mice, progression to adenocarcinoma. Activated 3-phosphoinositide-dependent protein kinase-1 was observed during cancer initiation combined with the activation of p70S6K (phospho-T389) and inactivation of the 4E-binding protein-1 (phosphorylated on T37/46) and was primarily restricted to those cases of prostate cancer that had progressed to adenocarcinoma. Activation of mTOR was not seen. Our data demonstrates that Pten functions downstream of ErbB-2 to restrict prostate epithelial transformation by blocking full activation of the PDK1 signaling cascade.