PTEN specifically catalyses the dephosphorylation of the 3` phosphate of the inositol ring in PIP3, resulting in the biphosphate product PIP2 (PtdIns(4,5)P2).

Thus PTEN binds the membrane through both its phosphatase and C2 domains, bringing the active site to the membrane-bound PIP3 to dephosphorylate it.

[5] Together they form an unusually deep and wide pocket which allows PTEN to accommodate the bulky phosphatidylinositol 3,4,5-trisphosphate substrate.

The dephosphorylation reaction mechanism of PTEN is thought to proceed through a phosphoenzyme intermediate, with the formation of a phosphodiester bond on the active site cysteine, C124.

Also not present in the crystal structure is the intrinsically disordered C-terminal region (CTR) (spanning residues 353–403).

The exact role of this 173-amino acid extension is not yet known, either causing PTEN to be secreted from the cell, or to interact with the mitochondria.

[citation needed] Most of these mutations cause the PTEN gene to make a protein that does not function properly or does not work at all.

[24] Mutations in the PTEN gene cause several other disorders that, like Cowden syndrome, are characterized by the development of non-cancerous tumors called hamartomas.

This severe stress leads to a spike in harmful mitochondrial DNA changes and abnormal levels of energy production in the cerebellum and hippocampus, brain regions critical for social behavior and cognition.

[26] Patients with defective PTEN can develop cerebellar mass lesions called dysplastic gangliocytomas or Lhermitte–Duclos disease.

[24] PTEN's strong link to cell growth inhibition is being studied as a possible therapeutic target in tissues that do not traditionally regenerate in mature animals, such as central neurons.