The phosphatase and tensin homolog (PTEN) deleted on chromosome 10 plays an important role in regulating T cell activation during inflammatory response. Activation of β-catenin is crucial for maintaining immune homeostasis. This study investigates the functional roles and molecular mechanisms by which PTEN-β-catenin signaling promotes regulatory T cell (Treg) induction in a mouse model of liver ischemia/reperfusion injury (IRI). We found that mice with myeloid-specific phosphatase and tensin homolog knockout (PTEN^M-KO ) exhibited reduced liver damage as evidenced by decreased levels of serum alanine aminotransferase, intrahepatic macrophage trafficking, and proinflammatory mediators compared with the PTEN-proficient (floxed phosphatase and tensin homolog [PTEN^FL/FL ]) controls. Disruption of myeloid PTEN-activated b-catenin promoted peroxisome proliferator-activated receptor gamma (PPARγ)-mediated Jagged-1/Notch signaling and induced forkhead box P3 (FOXP3)1 Tregs while inhibiting T helper 17 cells. However, blocking of Notch signaling by inhibiting γ-secretase reversed myeloid PTEN deficiency-mediated protection in ischemia/reperfusion-triggered liver inflammation with reduced FOXP3⁺ and increased retinoid A receptor-related orphan receptor gamma t-mediated interleukin 17A expression in ischemic livers. Moreover, knockdown of β-catenin or PPARγ in PTEN-deficient macrophages inhibited Jagged-1/Notch activation and reduced FOXP3⁺ Treg induction, leading to increased proinflammatory mediators in macrophage/T cell cocultures. In conclusion, our findings demonstrate that PTEN-β-catenin signaling is a novel regulator involved in modulating Treg development and provides a potential therapeutic target in liver IRI. Liver Transplantation 23 813-825 2017 AASLD.