The tumor microenvironment is profoundly immunosuppressive. We show that multiple tumor types create intratumoral immune suppression driven by a specialized form of regulatory T cell (Treg) activation dependent on the PTEN (phosphatase and tensin homolog) lipid phosphatase. PTEN acted to stabilize Tregs in tumors, preventing them from reprogramming into inflammatory effector cells. In mice with a Treg-specific deletion of PTEN, tumors grew slowly, were inflamed, and could not create an immunosuppressive tumor microenvironment. In normal mice, exposure to apoptotic tumor cells rapidly elicited PTEN-expressing Tregs, and PTEN-deficient mice were unable to maintain tolerance to apoptotic cells. In wild-type mice with large established tumors, pharmacologic inhibition of PTEN after chemotherapy or immunotherapy profoundly reconfigured the tumor microenvironment, changing it from a suppressive to an inflammatory milieu, and tumors underwent rapid regression. Thus, the immunosuppressive milieu in tumors must be actively maintained, and tumors become susceptible to immune attack if the PTEN pathway in Tregs is disrupted.