PURPOSE Pancreatic ductal adenocarcinoma (PDAC) progresses rapidly and exhibits profound resistance to treatment. We recently reported that a great majority of PDAC tumors and tumor cell lines express elevated levels of tissue transglutaminase (TG2). Here, we provide first evidence that TG2 expression in PDAC cells results in constitutive activation of focal adhesion kinase/AKT by modulating the expression of the tumor suppressor phosphatase PTEN. EXPERIMENTAL DESIGN Using PDAC cell lines, we determined the effect of TG2 overexpression on PTEN stability and functions. We confirmed the correlation between TG2 expression and PTEN levels in a few (n=51) PDAC tumor samples. RESULTS We observed that expression of TG2 is inversely correlated with PTEN expression in PDAC cells. Ectopic expression of TG2 inhibited PTEN phosphorylation and promoted its degradation by ubiquitin-proteasomal pathway. Conversely, down-regulation of TG2 by small interfering RNA up-regulated PTEN expression. Clinical relevance of these results was evident in an athymic nude mouse model where down-regulation of endogenous TG2 caused a significant retardation in PDAC xenograft growth. Importantly, the analysis of 51 tumor samples from patients with stage II PDAC revealed that overexpression of TG2 was associated with loss of PTEN expression (P=0.023; odds ratio, 4.1). In multivariate analysis, TG2-mediated loss of PTEN was a prognostic factor for overall survival in patients with stage II pancreatic ductal carcinoma independent of tumor stage/lymph node status and tumor differentiation (P=0.01). CONCLUSION TG2 expression in PDAC promotes degradation of PTEN by ubiquitin-proteasomal pathway and results in constitutive activation of focal adhesion kinase/AKT cell survival signaling.