Oncogenic signaling pathways are tightly regulated by negative feedback circuits and relief of these circuits represents a common mechanism of tumor drug resistance. Although the significance of these feedback pathways for signal transduction is evident, their relevance for cellular differentiation and morphogenesis in a genetically defined context is unclear. In this study, we used isogenic benign mammary organotypic cultures to interrogate the role of mTOR-mediated negative feedback in the specific setting of PTEN inactivation. We found that mTOR signaling promoted basal-like differentiation and repressed nuclear hormone receptor expression after short-term PTEN loss in murine cell cultures analyzed ex vivo. Unexpectedly, we found that PTEN inactivation inhibited growth factor-induced epithelial invasion and that downstream mTOR-mediated signaling feedback was both necessary and sufficient for this effect. Mechanistically, using isogenic MCF10A cells with and without somatic PTEN deletion, we showed that mTOR inhibition promoted EGF-mediated epithelial invasion by derepressing upstream EGF receptor, SRC tyrosine kinase, and phosphoinositide 3-kinase signaling. In addition to offering new signal transduction insights, these results bring to light a number of important and potentially clinically relevant cellular consequences of mTOR inhibition in the specific context of PTEN loss, including modulation of hormone and growth factor responsiveness and promotion of epithelial invasion. Our findings prompt future investigations of the possibility that mTOR inhibitor therapy may not only be ineffective but even deleterious in tumors with PTEN loss. Cancer Res; 73(16); 5218–31. ©2013 AACR.