PTEN is a multifaceted tumor suppressor that is highly sensitive to alterations in expression or function. The PTEN C-tail domain, which is rich in phosphorylation sites, has been implicated in PTEN stability, localization, catalytic activity, and protein interactions, but its role in tumorigenesis remains unclear. To address this, we utilized several mouse strains with nonlethal C-tail mutations. Mice homozygous for a deletion that includes S370, S380, T382 and T383 contain low PTEN levels and hyperactive AKT but are not tumor prone. Analysis of mice containing nonphosphorylatable or phosphomimetic versions of S380, a residue hyperphosphorylated in human gastric cancers, reveal that PTEN stability and ability to inhibit PI3K-AKT depends on dynamic phosphorylation-dephosphorylation of this residue. While phosphomimetic S380 drives neoplastic growth in prostate by promoting nuclear accumulation of β-catenin, nonphosphorylatable S380 is not tumorigenic. These data suggest that C-tail hyperphosphorylation creates oncogenic PTEN and is a potential target for anti-cancer therapy.