The tumour suppressor gene PTEN encodes a dual-specificity phosphatase that recognizes protein substrates and phosphatidylinositol-3,4,5-triphosphate. PTEN seems to play multiple roles in tumour suppression and the blockade of phosphoinositide-3-kinase signalling is important for its growth suppressive effects, although precise mechanisms are not fully understood. In this study, we show that PTEN plays a unique role in the insulin-signalling pathway in a breast cancer model. Ectopic expression of wild-type PTEN in MCF-7 epithelial breast cancer cells resulted in universal inhibition of Akt phosphorylation in response to stimulation by diverse growth factors and selective inhibition of MEK/extracellular signal-regulated kinase (ERK) phosphorylation stimulated by insulin or insulin-like growth factor 1 (IGF-1). The latter was accompanied by a decrease in the phosphorylation of insulin receptor substrate 1 (IRS-1) and the association of IRS-1 with Grb2/Sos, without affecting the phosphorylation status of the insulin receptor and Shc, nor Shc/Grb2 complex formation. The MEK inhibitor, PD980059, but not the PI3K inhibitor, wortmannin, abolished the effect of PTEN on insulin-stimulated cell growth. Without addition of insulin, wortmannin reduced PTEN-mediated growth suppression, whereas PD980059 had little effect, suggesting that PTEN suppresses insulin-stimulated cell growth by blocking the mitogen-activated protein kinase (MAPK) pathway. Furthermore, PD980059 treatment led to the downregulation of cyclin D1 and the suppression of cell cycle progression. Our data suggest that PTEN blocks MAPK phosphorylation in response to insulin stimulation by inhibiting the phosphorylation of IRS-1 and IRS-1/Grb2/Sos complex formation, which leads to downregulation of cyclin D1, inhibition of cell cycle progression and suppression of cell growth.