Urothelial carcinoma of the renal pelvis is a deadly disease with an unclear tumorigenic mechanism. We conducted gene expression profiling on a set of human tumors of this type and identified a phosphatidylinositol 3-kinase (PI3K)/AKT activation expression signature in 76.9% (n = 13) of our samples. Sequence analysis found both activating mutations of PIK3CA (13.6%, n = 22) and loss of heterozygosity at the PTEN locus (25%, n = 8). In contrast, none of the other subtypes of kidney neoplasms (e.g., clear-cell renal cell carcinoma) harbored PIK3CA mutations (n = 87; P < 0.001). Immunohistochemical analysis of urothelial carcinoma samples found loss of PTEN protein expression (36.4%, n = 11) and elevation of phosphorylated mammalian target of rapamycin (mTOR; 63.6%, n = 11). To confirm the role of the PI3K/AKT pathway in urothelial carcinoma, we generated mice containing biallelic inactivation of Pten in the urogenital epithelia. These mice developed typical renal pelvic urothelial carcinomas, with an incidence of 57.1% in mice older than 1 year. Laser capture microdissection followed by PCR confirmed the deletion of Pten exons 4 and 5 in the animal tumor cells. Immunohistochemical analyses showed increased phospho-mTOR and phospho-S6K levels in the animal tumors. Renal lymph node metastases were found in 15.8% of the animals with urothelial carcinoma. In conclusion, we identified and confirmed an important role for the PI3K/AKT pathway in the development of urothelial carcinoma and suggested that inhibitors of this pathway (e.g., mTOR inhibitor) may serve as effective therapeutic agents.