The tumor suppressor PTEN encodes a lipid phosphatase that negatively regulates the phosphatidylinositol 3-kinase/AKT cell survival pathway. Mutations of this gene are common in brain, prostate, endometrial, and gastric cancers but occur rarely in non-small-cell lung cancer (NSCLC), although the PTEN protein is often lost in lung tumors. We have studied hypermethylation of the PTEN promoter, loss of heterozygosity (LOH) at microsatellites in chromosome 10q23 (surrounding and intragenic to the PTEN locus), and hypermethylation of PTEN's highly homologous pseudogene, PTENP1, and their association with PTEN protein loss in a surgical case series study of primary NSCLC. PTEN protein expression was reduced or lost in 74% (86/117) of tumors, with loss occurring more often in well to moderately differentiated tumors. In squamous cell carcinomas, PTEN loss occurred significantly more often in early-stage (stage I or II) disease. PTEN protein loss also occurred more frequently in tumors with low to no aberrant TP53 staining. Methylation of PTEN occurred in 26% (39/151) of tumors, and LOH at 10q23 was rare, occurring in only 19% (17/90) of informative tumors. Neither methylation nor LOH was a significant predictor of PTEN protein expression, although LOH occurred exclusively in early-stage disease. In NSCLC, loss of PTEN protein expression occurs frequently, although the mechanism responsible for loss is not clearly attributable to deletion or epigenetic silencing. PTEN loss may also be a favorable prognostic marker, although further studies are needed to confirm this finding.