Deregulation of the phosphatidylinositol 3-kinase (PI3K) pathway either through loss of PTEN or mutation of the catalytic subunit α of PI3K (PIK3CA) occurs frequently in human cancer. We identified PIK3CA mutations in 26% of 342 human breast tumor samples and cell lines at about equal frequency in tumor stages I to IV. To investigate the relationship between PTEN and PIK3CA, we generated a cohort of tumors that had lost PTEN expression and compared it with a matched control set that had retained PTEN. A highly significant association between PIK3CA mutations and retention of PTEN protein expression was observed. In addition, PIK3CA mutations were associated with expression of estrogen and progesterone receptors (ER/PR), lymph node metastasis, and ERBB2 overexpression. The fact that PIK3CA mutations and PTEN loss are nearly mutually exclusive implies that deregulated phosphatidylinositol-3,4,5-triphosphate (PIP₃) is critical for tumorigenesis in a significant fraction of breast cancers and that loss of PIP₃ homeostasis by abrogation of either PIK3CA or PTEN relieves selective pressure for targeting of the other gene. The correlation of PIK3CA mutation to ER/PR-positive tumors and PTEN loss to ER/PR-negative tumors argues for disparate branches of tumor evolution. Furthermore, the association between ERBB2 overexpression and PIK3CA mutation implies that more than one input activating the PI3K/AKT pathway may be required to overcome intact PTEN. Thus, mutation of PIK3CA is frequent, occurs early in carcinoma development, and has prognostic and therapeutic implications.