Phosphatase and tensin homolog deleted on chromosome 10 (PTEN) is a negative regulator of phosphatidylinositol 3-kinase (PI3K) signaling that is frequently inactivated in colorectal cancer through mutation, loss of heterozygosity, or epigenetic mechanisms. The aim of this study was to determine the effect of intestinal-specific PTEN inactivation on intestinal epithelial homeostasis and tumorigenesis. PTEN was deleted specifically in the intestinal epithelium, by crossing PTEN(Lox/Lox) mice with villin(Cre) mice. PTEN was robustly expressed in the intestinal epithelium and maximally in the differentiated cell compartment. Targeted inactivation of PTEN in the intestinal epithelium of PTEN(Lox/Lox)/villin(Cre) mice was confirmed by genotyping, immunohistochemistry, and qPCR. While intestinal-specific PTEN deletion did not have a major effect on cell fate determination or proliferation in the small intestine, it did increase phosphorylated (p) protein kinase B (AKT) expression in the intestinal epithelium, and 19% of animals developed small intestinal adenomas and adenocarcinomas at 12 mo of age. These tumors demonstrated pAKT and nuclear β-catenin staining, indicating simultaneous activation of the PI3K/AKT and Wnt signaling pathways. These findings demonstrate that, while PTEN inactivation alone has a minimal effect on intestinal homeostasis, it can facilitate tumor promotion upon deregulation of β-catenin/TCF signaling, further establishing PTEN as a bona fide tumor suppressor gene in intestinal cancer.