Gain-of-function mutations in oncogenes and loss-of-function mutations in tumor suppressor genes (TSG) lead to cancer. In most human cancers, these mutations occur in somatic tissues. However, hereditary forms of cancer exist for which individuals are heterozygous for a germline mutation in a TSG locus at birth. The second allele is frequently inactivated by gene deletion, point mutation, or promoter methylation in classical TSGs that meet Knudson's two-hit hypothesis. Conversely, the second allele remains as wild-type, even in tumors in which the gene is haplo-insufficient for tumor suppression. This article highlights the importance of PTEN, APC, and other tumor suppressors for counteracting aberrant PI3K, β-catenin, and other oncogenic signaling pathways. We discuss the use of gene-engineered mouse models (GEMM) of human cancer focusing on Pten and Apc knockout mice that recapitulate key genetic events involved in initiation and progression of human neoplasia. Finally, the therapeutic potential of targeting these tumor suppressor and oncogene signaling networks is discussed.