We were interested in the elucidation of the interaction between the heparan sulfate proteoglycan, perlecan, and PTEN in the regulation of vascular smooth muscle cell (SMC) growth. We verified serum-stimulated DNA synthesis, and Akt and FAK phosphorylation were significantly reduced in SMCs overexpressing wild-type PTEN. Our previous studies showed perlecan is a potent inhibitor of serum-stimulated SMC growth. We report in the present study, compared with SMCs plated on fibronectin, serum-stimulated SMCs plated on perlecan exhibited increased PTEN activity, decreased FAK and Akt activities, and high levels of p27, consistent with SMC growth arrest. Adenoviral-mediated overexpression of constitutively active Akt reversed perlecan-induced SMC growth arrest while morpholino antisense-mediated loss of endogenous PTEN resulted in increased growth and phosphorylation of FAK and Akt of SMCs on perlecan. Immunohistochemical and Western analyses of balloon-injured rat carotid artery tissues showed a transient increase in phosphoPTEN (inactive) after injury, correlating to high rates of neointimal cell replication; phosphoPTEN was largely limited to actively replicating SMCs. Similarly, in the developing rat aorta, we found increased PTEN activity associated with increased perlecan deposition and decreased SMC replication rates. However, significantly decreased PTEN activity was detected in aortas of perlecan-deficient mouse embryos, consistent with SMC hyperplasia observed in these animals, compared with E17.5 heterozygous controls that produce abundant amounts of perlecan at this developmental time point. Our data show PTEN is a potent endogenously produced inhibitor of SMC growth and increased PTEN activity mediates perlecan-induced suppression of SMC proliferation.