The tumor suppressor phosphatase and tensin homolog (PTEN) is a nonredundant phosphatase, counteracting one of the most critical cancer-promoting pathways: the phosphatidylinositol 3-kinase (PI3K)/Akt signaling pathway. In addition to the canonical function of dephosphorylation of phosphatidylinositol-3,4,5-trisphosphate (PIP3), recent studies showed the intriguing roles of PTEN in regulating genomic instability, DNA repair, stem cell self-renewal, cellular senescence, and cell migration and/or metastasis. Clinically, PTEN mutations and deficiencies are prevalent in many types of human cancers. Severe PTEN deficiency is also associated with advanced tumor stage and therapeutic resistance, such as the resistance to trastuzumab, an anti-HER2 therapy. Currently, targeting the deregulated PI3K/PTEN-Akt signaling axis has emerged as one of the major tenets in anticancer drug development. In this review, we highlight our current knowledge of PTEN function and the recent discoveries in dissecting the PTEN signaling pathway. The deregulations of PTEN in cancers, clinical lessons, and new prospects of rationally designed PI3K/Akt-targeted therapy for effective cancer treatment are also discussed.