BackgroundThe tumor suppressor gene Phosphatase and tensin homolog (PTEN) is highly expressed in neural progenitor cells (NPCs) and plays an important role in development of the central nervous system. As a dual-specificity phosphatase, the loss of PTEN phosphatase activity has been linked to various diseases.ResultsHere we report that the protein phosphatase activity of Pten is critical for regulating differentiation of neural progenitor cells. First we found that deletion of Pten promotes neuronal differentiation. To determine whether the protein or lipid phosphatase activity is required for regulating neuronal differentiation, we generated phosphatase domain-specific Pten mutations. Interestingly, only expression of protein phosphatase-deficient mutant Y138L could mimic the effect of knocking down Pten, suggesting the protein phosphatase of Pten is critical for regulating NPC differentiation. Importantly, we showed that the wild-type and lipid phosphatase mutant (G129E) forms of Pten are able to rescue neuronal differentiation in Pten knockout NPCs, but mutants containing protein phosphatase mutant cannot. We further found that Pten-dependent dephosphorylation of CREB is critical for neuronal differentiation.ConclusionOur data indicate that the protein phosphatase activity of PTEN is critical for regulating differentiation of NSCs during cortical development.Electronic supplementary materialThe online version of this article (doi:10.1186/s13041-015-0114-1) contains supplementary material, which is available to authorized users.