Hepatocellular carcinoma (HCC) is a typical hypervascular tumor, and increased levels of vascular endothelial growth factor (VEGF) are associated with progression of HCC. Tumor suppression gene PTEN (phosphatase and tensin homolog deleted on chromosome 10), an important antagonist of the phosphoinositide-3-kinase (PI3K)/adenosine triphosphate-dependent tyrosine kinase (Akt) pathway, is also commonly lost or mutated in HCC. However, the effect of PTEN on VEGF-mediated angiogenesis in HCC remains unknown. To explore this relationship, we expressed a panel of PTEN mutants in human HCC cells with low expression of PTEN (HepG2 cells). Overexpression of PTEN in HepG2 cells resulted in the downregulation of proliferation and migration of cocultured endothelial cells and decreased expression of hypoxia-inducible factor 1 (HIF-1) and VEGF. Similarly, using a nude mouse model, we demonstrated that PTEN decreased expression of HIF-1 and VEGF and suppressed HepG2-induced angiogenesis. This inhibitory effect was not observed in cells expressing a phosphatase-deficient PTEN mutant, suggesting that PTEN inhibits angiogenesis and VEGF through a phosphatase-dependent pathway. Strikingly, reintroducing the C2 domain of PTEN also resulted in a significant decrease in angiogenesis and VEGF expression, although it did not affect Akt phosphorylation or HIF-1 expression. In summary, this study suggests the novel viewpoint that PTEN suppresses angiogenesis and VEGF expression in HCC through both phosphatase-dependent and -independent mechanisms.