Leptin hyperpolarizes certain hypothalamic neurons by increasing ATP-sensitive K (K_ATP) channel activity, an action that requires F-actin re-organization in a phosphoinositide 3-kinase (PI3K)-dependent manner (Mirshamsi et al. 2004). PTEN (phosphatase and tensin homologue deleted on chromosome ten) is a dual (protein and lipid) phosphatase, with the lipid phosphatase function negatively regulating PI3K-dependent signalling (Leslie & Downes, 2004). The protein phosphatase activity and the C-terminal C2 domain of PTEN are also implicated in its biological activity. As over-expression of PTEN inhibits leptin-induced F-actin re-organization in hypothalamic cells (Ning et al. 2004a), we examined which component of PTEN is responsible. Hypothalamic cell lines GT1-7 and N29/4 were cultured and plated out as described (Mirshamsi et al. 2004; Belsham et al. 2004). Wild-type and mutant PTEN-GFP constructs were introduced to cells by transfection. PTEN siRNA was designed and used as described by Ning et al. (2004b). Leptin, wortmannin or LY294002 application, F- and G-actin staining, immunoblotting and image acquisition by confocal microscopy were performed as described previously (Mirshamsi et al. 2004). Data are expressed as mean±S.D. of at least 12 cells from 4 experiments, expressed as a ratio of control and analysed by Student’s paired t test. Over-expression of wild-type PTEN decreased (to 0.35±0.11), and depression of endogenous PTEN by siRNA (n = 4) or dominant negative PTEN C124S (lipid and protein phosphatase inactive; n = 4), increased levels of the PI3K product phosphatidylinositol 3,4,5-trisphosphate (PIP3) by 2.8±1.0 and 3.3±1.5, respectively (P<0.05). The increased PIP3 was associated with reduced F-actin levels, to 0.27±0.12 and 0.36±0.11, respectively (P<0.05), and prevented by PI3K inhibition (n = 4). The C2 domain per se had no effect on PIP3 or F-actin and did not block leptin action. In contrast, over-expression of the PTEN G129E mutant (lipid phosphatase inactive, protein phosphatase active), increased PIP3 (by 3.3±1.4), did not change F-actin levels but inhibited leptin-induced reduction of F-actin (leptin: 0.32±0.09, G129E and leptin: 0.98±0.14; P<0.05). This latter effect was prevented by deletion of the PDZ (PSD-95/Dig/ZO-1) interacting motif of PTEN G129E, but not by PDZ motif deletion of C2 or wild-type PTEN (n = 4). Thus, PTEN protein phosphatase activity inhibits leptin-induced rearrangement of the actin cytoskeleton in hypothalamic cells by virtue of PDZ motif membrane targeting.