The tumor suppressor PTEN plays an essential role in regulating signaling pathways involved in cell growth and apoptosis and is inactivated in a wide variety of tumors. In this study, we have identified a protein, referred to as PICT-1 (protein interacting with carboxyl terminus 1), that binds to the C terminus of PTEN and regulates its phosphorylation and turnover. Down-regulation of PICT-1 in MCF7 cells by RNA interference enhances the degradation of PTEN with a concomitant decrease in its phosphorylation. PTEN C-terminal tumor-associated mutants, which are highly susceptible to protein degradation, have lost the ability to bind to PICT-1 along with their reduced phosphorylation, suggesting that their rapid turnover results from impaired binding to PICT-1. Our results identify PICT-1 as a PTEN-interacting protein that promotes the phosphorylation and stability of PTEN. These findings suggest a novel molecular mechanism underlying the turnover of PTEN, which also provides an explanation for the loss of PTEN function due to C-terminal mutations.