The PTEN tumor suppressor is frequently affected in cancer cells, and inherited PTEN mutation causes cancer-susceptibility conditions such as Cowden syndrome. PTEN acts as a plasma-membrane lipid-phosphatase antagonizing the phosphoinositide 3-kinase/AKT cell survival pathway. However, PTEN is also found in cell nuclei, but mechanism, function, and relevance of nuclear localization remain unclear. We show that nuclear PTEN is essential for tumor suppression and that PTEN nuclear import is mediated by its monoubiquitination. A lysine mutant of PTEN, K289E associated with Cowden syndrome, retains catalytic activity but fails to accumulate in nuclei of patient tissue due to an import defect. We identify this and another lysine residue as major monoubiquitination sites essential for PTEN import. While nuclear PTEN is stable, polyubiquitination leads to its degradation in the cytoplasm. Thus, we identify cancer-associated mutations of PTEN that target its posttranslational modification and demonstrate how a discrete molecular mechanism dictates tumor progression by differentiating between degradation and protection of PTEN.