The tumor suppressor gene, MMAC/PTEN, has phosphatase, C2, and PDZ-binding domains as well as potential sites of regulation by phosphorylation, including tyrosine phosphorylation, which may contribute to its ability to modulate cell growth and viability. Several obvious and significant motifs were found in MMAC/PTEN, including most notably, a catalytic domain of tyrosine phosphatase (IHCxxGxxRS/T) and several potential tyrosine phosphorylation sites. To examine the functional significance of tyrosine phosphorylation of MMAC/PTEN, retroviral constructs were generated with mutations at two putative tyrosine phosphorylation sites (Y240A/Y240F and Y315A/Y315F). Stable expression of wild-type MMAC/PTEN in U251 human glioma cells (which do not normally produce a functional MMAC/PTEN gene product) resulted in a significant reduction of tumor growth in nude mice, decreased growth rate, saturation density, and colony formation in vitro, as well as dephosphorylation of D3-phosphorylated phosphatidylinositols (PtdIns) in vitro. Mutation of Y240 or Y315 to either alanine or phenylalanine abrogated the ability of MMAC/PTEN to alter growth rate, saturation density, and colony formation in vitro. The ability of MMAC/PTEN to limit tumor growth in nude mice was markedly decreased but not abrogated by mutation of Y240 or Y315 to alanine. Thus, Y240 and Y315 are required for MMAC/PTEN to decrease tumor growth in vitro and in vivo. In contrast to wild-type MMAC/PTEN, mutant MMAC/PTEN containing Y240A or Y315A was unable to dephosphorylate D3-phosphorylated PtdIns in vitro. Thus, Y240A and Y315A are involved in the ability of MMAC/PTEN to dephosphorylate PtdIns and regulate tumor cell growth in vitro and in vivo.