The PI3K pathway regulates cell metabolism, proliferation, and migration, and its dysregulation is common in cancer. We now show that both physiologic and oncogenic activation of PI3K signaling increase the expression of its negative regulator PTEN. This limits the duration of the signal and output of the pathway. Physiologic and pharmacologic inhibition of the pathway reduces PTEN and contributes to the rebound in pathway activity in tumors treated with PI3K inhibitors and limits their efficacy. Regulation of PTEN is due to mTOR/4E-BP1-dependent control of its translation and is lost when 4E-BP1 is deleted. Translational regulation of PTEN is therefore a major homeostatic regulator of physiologic PI3K signaling and plays a role in reducing the pathway activation by oncogenic PIK3CA mutants and the antitumor activity of PI3K pathway inhibitors. However, pathway output is hyperactivated in tumor cells with coexistent PI3K mutation and loss of PTEN function.