Inactivation of phosphatase and tensin homology deleted on chromosome 10 (PTEN) is linked to increased PI3K-AKT signaling, enhanced organismal growth, and cancer development. Here we generated and analyzed Pten knock-in mice harboring a C2 domain missense mutation at phenylalanine 341 (Pten(FV)), found in human cancer. Despite having reduced levels of PTEN protein, homozygous Pten(FV/FV) embryos have intact AKT signaling, develop normally, and are carried to term. Heterozygous Pten(FV/+) mice develop carcinoma in the thymus, stomach, adrenal medulla, and mammary gland but not in other organs typically sensitive to Pten deficiency, including the thyroid, prostate, and uterus. Progression to carcinoma in sensitive organs ensues in the absence of overt AKT activation. Carcinoma in the uterus, a cancer-resistant organ, requires a second clonal event associated with the spontaneous activation of AKT and downstream signaling. In summary, this PTEN noncatalytic missense mutation exposes a core tumor suppressor function distinct from inhibition of canonical AKT signaling that predisposes to organ-selective cancer development in vivo.