The dual-function phosphatase and tensin homolog deleted on chromosome 10 (PTEN) is the second most frequently mutated gene in human cancers. PTEN counteracts the functions of many growth factors, the most prevalent of which is insulin-like growth factor II (IGF-II). PTEN expression is stimulated by IGF-II forming a feedback loop. Investigating IGF-binding protein (IGFBP) modulation of IGF-II actions on MCF-7 breast cancer cells, we found that IGFBP-2 also regulates PTEN. The MCF-7 cells were not responsive to high doses of IGF-II due to induction of PTEN, which was not observed with an IGF-II-analog that does not bind to IGFBPs or in the presence of an inhibitor that prevents IGFs associating with IGFBPs. These cells predominantly produce IGFBP-2: blocking IGFBP-2 with a specific antibody, or preventing IGFBP-2 binding to integrins, restored the induction of PTEN and the cells were non-responsive to high doses of the IGF-II-analog. Our findings indicate that breast cancer cells do not respond to high doses of IGF-II due to induction of PTEN, but IGFBP-2, when free from IGF-II can suppress PTEN. Levels of IGFBP-2 are elevated frequently in human tumors: its ability to regulate PTEN could have important implications in relation to therapeutic strategies targeting growth factor pathways.