Genetic changes in HER2, PTEN, PIK3CA and AKT1 are all common in breast cancer and lead to the elevated phosphorylation of downstream targets of the PI3K/AKT signalling pathway. Changes in HER2, PTEN, PIK3CA and AKT have all been reported to lead to both enhanced proliferation and failures in hollow lumen formation in three dimensional epithelial culture models, but it is not clear whether these failures in lumen formation are caused by any failure in the spatial coordination of lumen formation (hollowing) or purely a failure in the apoptosis and clearance of luminal cells (cavitation). Here, we use normal murine mammary gland (NMuMG) epithelial cells, which form a hollow lumen without significant apoptosis, to compare the transformation by these four genetic changes. We find that either mutant PIK3CA expression or PTEN loss, but not mutant AKT1 E17K, cause disrupted epithelial architecture, whereas HER2 overexpression drives strong proliferation without affecting lumen formation in these cells. We also show that PTEN requires both lipid and protein phosphatase activity, its extreme C-terminal PDZ binding sequence and probably Myosin 5A to control lumen formation through a mechanism that does not correlate with its ability to control AKT, but which is selectively lost through mutation in some tumours. These findings correlate AKT-independent signalling activated by mutant PIK3CA or PTEN loss, but not strongly by HER2, with disrupted epithelial architecture and tumour formation.Oncogene advance online publication, 22 October 2012; doi:10.1038/onc.2012.459.