Mutational alterations of PTEN and PIK3CA, which negatively and positively regulate PI3-kinase activity, respectively, have been observed in many types of human cancer. To explore the implication of PTEN and PIK3CA mutations in gastric tumorigenesis, we characterized the expression and mutation status of the genes in 126 gastric tissues and 15 cell lines. Expression of PTEN transcript was abnormally low in 5 of 15 (33%) cell lines and 20 of 55 (36%) primary carcinomas, whereas 0 of 71 noncancerous tissues including 16 benign tumors showed altered expression. Allelotyping analysis using an intragenic polymorphism (IVS4+109) revealed that 14 of 30 (47%) informative cases carried LOH of the gene, which is closely linked to low expression. The LOH rate was significantly higher in advanced tumors [12 of 19 (63%)] compared to early-stage tumors [2 of 11 (18%)] and more frequent in poorly differentiated tumors [9 of 13 (69%)] than well- or moderately differentiated tumors [5 of 17 (29%)]. Interestingly, however, none of the LOH tumors carried mutational disruption of the remaining allele, suggesting haploinsufficiency of PTEN in gastric tumorigenesis. Methylation studies revealed that PTEN pseudogene, but not PTEN, is methylated in cell lines and primary tumors, indicating that PTEN is not a target of epigenetic silencing in gastric cancers and that the pseudogene should be considered more carefully in methylation analysis of the PTEN promoter. Genomic amplification of PIK3CA was found in 9 of 15 (60%) cell lines and 20 of 55 (36.4%) primary tumors but in no noncancerous tissues. Furthermore, PIK3CA amplification was predominantly detected in tumors with no PTEN alterations, suggesting that mutations of PTEN and PIK3CA are mutually exclusive events in gastric tumorigenesis. Amplification of PIK3CA was strongly associated with increased expression of PIK3CA transcript and elevated levels of phospho-AKT. Collectively, our data reveal that 13 of 15 (87%) gastric cell lines and 31 of 55 (56%) primary carcinomas harbored either amplification of PIK3CA or abnormal reduction of PTEN. Mutually exclusive alterations of PTEN and PIK3CA also suggest that mutations of either gene could activate the PI3-kinase/AKT signaling pathway, which is directly linked to the malignant progression of gastric tumor cells.