A broad spectrum of mutations in PTEN, encoding a lipid phosphatase that inactivates the P13-K/AKT pathway, is found associated with primary tumors. Some of these mutations occur outside the phosphatase domain, suggesting that additional activities of PTEN function in tumor suppression. We report a nuclear function for PTEN in controlling chromosomal integrity. Disruption of Pten leads to extensive centromere breakage and chromosomal translocations. PTEN was found localized at centromeres and physically associated with CENP-C, an integral component of the kinetochore. C-terminal PTEN mutants disrupt the association of PTEN with centromeres and cause centromeric instability. Furthermore, Pten null cells exhibit spontaneous DNA double-strand breaks (DSBs). We show that PTEN acts on chromatin and regulates expression of Rad51, which reduces the incidence of spontaneous DSBs. Our results demonstrate that PTEN plays a fundamental role in the maintenance of chromosomal stability through the physical interaction with centromeres and control of DNA repair. We propose that PTEN acts as a guardian of genome integrity.