The phosphoinositide 3-kinase (PI3K) signaling pathway critically regulates cell growth and cell survival. Mutations that lead to aberrant activation of this pathway are frequent events in human cancers. Here we discuss some recent studies identifying the mechanisms by which p85, the regulatory subunit of PI3K, negatively regulates PI3K signaling. While necessary for the stability and membrane recruitment of the p110 catalytic subunit of PI3K. p85 represses the basal activity of p110 in the absence of growth factor stimulation. In its unbound, free form, p85 sequesters the adaptor protein IRS-1 and therefore limits the extent of PI3K signaling downstream of the insulin and IGF-1 receptors. These findings lend new insight to how changes in p85 gene dosage or mutations in p85 could lead to the hyper-activation of PI3K and thus contribute towards tumorigenesis.