The tumor suppressor gene phosphatase and tensin homolog (PTEN) is inactivated in many human cancers. However, it is unknown whether PTEN functions as a tumor suppressor in human Philadelphia chromosome–positive leukemia that includes chronic myeloid leukemia (CML) and B-cell acute lymphoblastic leukemia (B-ALL) and is induced by the BCR-ABL oncogene. By using our mouse model of BCR-ABL–induced leukemias, we show that Pten is down-regulated by BCR-ABL in leukemia stem cells in CML and that PTEN deletion causes acceleration of CML development. In addition, overexpression of PTEN delays the development of CML and B-ALL and prolongs survival of leukemia mice. PTEN suppresses leukemia stem cells and induces cell-cycle arrest of leukemia cells. Moreover, PTEN suppresses B-ALL development through regulating its downstream gene Akt1. These results demonstrate a critical role of PTEN in BCR-ABL–induced leukemias and suggest a potential strategy for the treatment of Philadelphia chromosome–positive leukemia.