Inhibition of the phospholipid phosphatase and tumor suppressor PTEN leads to excessive polarized cell growth during directed cell migration and neurite outgrowth. These processes require the precise regulation of both the actin and microtubule cytoskeleton. While PTEN is known to regulate actin dynamics through phospholipid modulation, whether and how PTEN regulates microtubule dynamics is unknown. Here, we show that depletion of PTEN leads to elevated levels of stable and post-translationally modified (detyrosinated) microtubules in fibroblasts and developing neurons. Further, PTEN depletion enhanced axon outgrowth, which was rescued by reducing the level of detyrosinated microtubules. These data demonstrate a novel role of PTEN in regulating the microtubule cytoskeleton. They further show a novel function of detyrosinated microtubules in axon outgrowth. Specifically, PTEN suppresses axon outgrowth by down-regulating the level of detyrosinated microtubules. Our results suggest that PTEN's role in preventing excessive cell growth in cancerous and neurodevelopmental phenotypes is partially exerted by stabilization and detyrosination of the microtubule cytoskeleton.