Germline and somatic PTEN mutations are found in Cowden syndrome (CS) and multiple sporadic malignancies, respectively. PTEN function appears to be modulated by subcellular compartmentalization, and mislocalization may affect function. We have shown that cellular ATP levels affect nuclear PTEN levels. Here, we examined the ATP-binding capabilities of PTEN and functional consequences, relevant to cancer-associated mutations. PTEN mutation analysis of CS patients and sporadic colorectal carcinomas and comparative aminoacid analysis were utilized to identify mutations in ATP-binding motifs. The ability of wild-type (WT) or mutant PTEN to bind ATP was assessed by ATP-agarose-binding assays. Subcellular fractionation, western blotting, confocal microscopy and growth assays were used to determine relative nuclear-cytoplasmic localization and function. Somatic colorectal carcinoma-derived PTEN missense mutations were associated with nuclear mislocalization. These mutations altered cellular proliferation, apoptosis and anchorage-dependent growth. Examination of PTEN's amino acid sequence revealed these mutations resided in previously undescribed ATP-binding motifs (c.60-73; c.122-136). In contrast to WT PTEN, both cancer-associated somatic and germline-derived PTEN missense mutations, which lie within the ATP-binding motifs, result in mutant PTEN that does not bind ATP efficiently. We also show that CS patients with germline ATP-binding motif-mutations had nuclear PTEN mislocalization. Of four unrelated patients with functional germline ATP-binding domain mutations, all three female patients had breast cancers. Germline and somatic mutations within PTEN's ATP-binding domain play important pathogenic roles in both heritable and sporadic carcinogenesis by PTEN nuclear mislocalization resulting in altered signaling and growth. Manipulation of ATP may represent novel therapies in tumors with such PTEN alterations.