Hepatocellular carcinoma (HCC) is one of the most common malignant tumors. Most patients with HCC die within one year after diagnosis largely because of frequent tumor recurrence and metastasis. The tumor suppressor gene PTEN (phosphatase and tensin homolog deleted on chromosome 10) is one of the most commonly lost or mutated genes in a variety of human cancers, including HCC. PTEN antagonizes phosphoinositide-3-kinase (PI3K)/ATP-dependent tyrosine kinase (Akt) signaling, thereby negatively regulating a multitude of biological aggressive tumor behaviors. However, the direct role and mechanism of PTEN in the regulation of invasion and invasion-related gene expression in HCC remain to be elucidated. In this study, we introduced wild-type PTEN or phosphatase-dead PTEN into HepG2 cells that have low expression of PTEN. We found that overexpression of PTEN inhibits HepG2 cell growth via cell cycle arrest without inducing apoptosis. Matrigel invasion and scratch assays indicated that PTEN significantly inhibits HepG2 cell migration and invasion in vitro. On the molecular level, overexpression of PTEN suppressed expression of matrix metalloproteinase (MMP)-2 and -9 in HepG2 cells. Similarly, treatment of HepG2 cells with the PI3K/Akt pharmacological inhibitor, LY294002, potently suppressed cell migration and invasion as well as expression of MMPs. However, the phosphatase-dead PTEN mutant did not exert the same effects. Our data show that PTEN not only inhibits HepG2 cell growth via cell cycle arrest, but also suppresses cell invasion in a PI3K/Akt/MMP-dependent manner, which suggests that loss or mutation of PTEN may contribute to increased cell invasion and facilitates HCC progression.