Insulin and insulin-like growth factor-1 signaling have fundamental roles in energy metabolism, growth and development. Recent research suggests hyperactive insulin receptor (IR) and hyperinsulinemia are cancer risk factors. However, the mechanisms that account for the link between the hyperactive insulin signaling and cancer risk are not well understood. Here we show that an insulin-like signaling inhibits the DAF-18/(phosphatase and tensin homolog) PTEN tumour suppressor in Caenorhabditis elegans and that this regulation is conserved in human breast cancer cells. We show that inhibiting the IR increases PTEN protein levels, while increasing insulin signaling decreases PTEN protein levels. Our results show that the kinase region of IRb subunit physically binds to PTEN and phosphorylates on Y27 and Y174. Our genetic results also show that DAF-2/IR negatively regulates DAF-18/PTEN during C. elegans axon guidance. As PTEN is an important tumour suppressor, our results therefore suggest a possible mechanism for increased cancer risk observed in hyperinsulinemia and hyperactive IR individuals.