Phosphoinositide 3-kinase (PI3K) is important in TCR signaling. PI3K generates phosphatidylinositol 3, 4, 5-trisphosphate (PI-3,4,5-P3), which regulates membrane localization and/or activity of multiple signaling proteins. PTEN (phosphatase and tensin homologue deleted on chromosome 10) opposes PI3K, reversing this reaction. Maintaining the balance between these two enzymes is important for normal T cell function. Here we use the PTEN-null Jurkat T cell line to address the role of PTEN in modulating proximal and distal TCR-signaling events. PTEN expression at levels that restored low basal Akt phosphorylation (an indicator of PI-3,4,5-P3 levels), but which were not themselves cytotoxic, had minimal effect on TCR-stimulated activation of phospholipase Cgamma1 and Ca2+ flux, but reduced the duration of extracellular signal-regulated kinase (Erk) activation. Distal signaling events, including nuclear factor of activated T cells (NFAT) activation, CD69 expression and IL-2 production, were all inhibited by PTEN expression. Notably, PTEN did not block TCR-stimulated PI-3,4,5-P3 accumulation. The effect of PTEN on distal TCR signaling events was strongly correlated with the loss of the constitutive Akt activation and glycogen synthase kinase-3 (GSK3) inhibition that is typical of Jurkat cells, and could be reversed by expression of activated Akt or pharmacologic inhibition of GSK3. These results suggest that PTEN acts in T cells primarily to control basal PI-3,4,5-P3 levels, rather than opposing PI3K acutely during TCR stimulation.