PTEN is a tumor suppressor whose function is frequently lost in human cancer. It possesses a lipid phosphatase activity that represses the activation of PI3 kinase/Akt signaling, leading to decreased cell growth, proliferation, and survival. The potential for PTEN to regulate transcription of the large rRNAs by RNA polymerase I (RNA Pol I) was investigated. As increased synthesis of rRNAs is a hallmark of neoplastic transformation, the ability of PTEN to control the transcription of rRNAs might be crucial for its tumor suppressor function. The expression of PTEN in PTEN-deficient cells represses RNA Pol I transcription, while decreasing PTEN expression enhances transcription. PTEN-mediated repression requires its lipid phosphatase activity and is independent of the p53 status of the cell. This event can be uncoupled from PTEN's ability to regulate the cell cycle. RNA Pol I is regulated through PI3 kinase/Akt/mammalian target of rapamycin/S6 kinase, and the expression of constitutively activated S6 kinase is able to abrogate transcription repression by PTEN. No change in the expression of the RNA Pol I transcription components, upstream binding factor or SL1, was observed upon PTEN expression. However, chromatin immunoprecipitation assays demonstrate that PTEN differentially reduces the occupancy of the SL1 subunits on the rRNA gene promoter. Furthermore, PTEN induces dissociation of the SL1 subunits. Together, these results demonstrate that PTEN represses RNA Pol I transcription through a novel mechanism that involves disruption of the SL1 complex.