Gastric cancer is highly invasive, aggressively malignant, and amongst the most prevalent of all forms of cancer. Despite improved management strategies, early stage diagnosis of gastric cancer and accurate prognostic assessment is still lacking. Several recent reports have indicated that the pathogenesis of gastric cancer involves complex molecular mechanisms and multiple genetic and epigenetic alterations in oncogenes and tumor suppressor genes. Functional inactivation of the tumor suppressor protein PTEN (Phosphatase and Tensin Homolog) has been detected in multiple cases of gastric cancer, and already shown to be closely linked to the development, progression and prognosis of the disease. Inactivation of PTEN can be attributed to gene mutation, loss of heterozygosity, promoter hypermethylation, microRNA- mediated regulation of gene expression, and post-translational phosphorylation. PTEN is also involved in mechanisms regulating tumor resistance to chemotherapy. This review provides a comprehensive analysis of PTEN and its roles in gastric cancer, and emphasizes its potential benefits in early diagnosis and gene therapy-based treatment strategies.