Tumor suppressor PTEN controls genomic stability and inhibits tumorigenesis. The N-terminal phosphatase domain of PTEN antagonizes the PI3K/AKT pathway, but its C-terminal function is less defined. Here, we describe a knockin mouse model of a nonsense mutation that results in the deletion of the entire Pten C-terminal region, referred to as Pten^ΔC. Mice heterozygous for Pten^ΔC develop multiple spontaneous tumors, including cancers and B cell lymphoma. Heterozygous deletion of the Pten C-terminal domain also causes genomic instability and common fragile site rearrangement. We found that Pten C-terminal disruption induces p53 and its downstream targets. Simultaneous depletion of p53 promotes metastasis without influencing the initiation of tumors, suggesting that p53 mainly suppresses tumor progression. Our data highlight the essential role of the PTEN C terminus in the maintenance of genomic stability and suppression of tumorigenesis.