ABSTRACT: We investigated the kinetic behaviour and substrate specificity of PTEN (phosphatase and tensin homologue deleted on chromosome 10) using unilamellar vesicles containing substrate lipids in a background of phosphatidylcholine. PTEN displays the characteristics expected of an interfacial enzyme, since the rate of enzyme activity is dependent on the surface concentration of the substrate lipids used (mol fraction), as well as the bulk concentration. Surface-dilution analysis revealed the catalytic efficiency of PTEN for PtdIns(3,4,5) P (3) to be 200-fold greater than for either PtdIns(3,4) P (2) or PtdIns(3,5) P (2), and 1000-fold greater than for PtdIns3 P. The interfacial K (m) value of PTEN for PtdIns(3,4,5) P (3) was very low, reflecting the small proportions of this lipid that are present in cellular membranes. The catalytic-centre activity ( k (cat)) for PtdIns(3,4,5) P (3) was at least 200-fold greater than that for the water-soluble substrate Ins(1,3,4,5) P (4). The preference for lipid substrates may result from an interfacial activation of the enzyme, rather than processive catalysis of vesicular substrates. Moreover, both PtdIns(4,5) P (2) and univalent salts stimulated the activity of PTEN for PtdIns(3,4,5) P (3), but profoundly inhibited activity against Ins(1,3,4,5) P (4). The stimulatory effect of PtdIns(4,5) P (2) was greater in magnitude and more potent in comparison with other anionic phospholipid species. A mutation in the lipid-binding C2 domain (M-CBR3) that is biologically inactive did not alter overall catalytic efficiency in this model, but decreased the efficiency of the interfacial binding step, demonstrating its importance in the catalytic mechanism of PTEN.