The PTEN tumor suppressor controls cell death and survival by regulating functions of various molecular targets. While the role of PTEN lipid-phosphatase activity on PtdIns(3,4,5)P3 and inhibition of PI3K pathway is well characterized, the biological relevance of PTEN protein-phosphatase activity remains undefined. Here, using knockin (KI) mice harboring cancer-associated and functionally relevant missense mutations, we show that although loss of PTEN lipid-phosphatase function cooperates with oncogenic PI3K to promote rapid mammary tumorigenesis, the additional loss of PTEN protein-phosphatase activity triggered an extensive cell death response evident in early and advanced mammary tumors. Omics and drug-targeting studies revealed that PI3Ks act to reduce glucocorticoid receptor (GR) levels, which are rescued by loss of PTEN protein-phosphatase activity to restrain cell survival. Thus, we find that the dual regulation of GR by PI3K and PTEN functions as a rheostat that can be exploited for the treatment of PTEN loss-driven cancers.