Regulation of RNA polymerase II (RNAPII)-mediated transcription controls cellular phenotypes such as cancer. Phosphatase and tensin homologue deleted on chromosome ten (PTEN), one of the most commonly altered tumor suppressors in cancer, affects transcription via its role in antagonizing the PI3K/AKT signaling pathway. Using co-immunoprecipitations and proximal ligation assays we provide evidence that PTEN interacts with AFF4, RNAPII, CDK9, cyclin T1, XPB and CDK7. Using ChIP-seq, we show that PTEN co-localizes with RNAPII and binds to chromatin in promoter and putative enhancer regions identified by histone modifications. Furthermore, we show that loss of PTEN affects RNAPII occupancy in gene bodies and further correlates with gene expression changes. Interestingly, PTEN binds to promoters and negatively regulates the expression of genes involved in transcription including AFF4 and POL2RA, which encodes a subunit of RNAPII. Loss of PTEN also increased cells' sensitivity to transcription inhibition via small molecules, which could provide a strategy to target PTEN-deficient cancers. Overall, our work describes a previously unappreciated role of nuclear PTEN, which by interacting with the transcription machinery in the context of chromatin exerts an additional layer of regulatory control on RNAPII-mediated transcription.