Despite the structural conservation of PTEN with dual-specificity phosphatases, there have been no reports regarding the regulatory mechanisms that underlie this potential dual-phosphatase activity. Here, we report that K27-linked polyubiquitination of PTEN at lysines 66 and 80 switches its phosphoinositide/protein tyrosine phosphatase activity to protein serine/threonine phosphatase activity. Mechanistically, high glucose, TGF-β, CTGF, SHH, and IL-6 induce the expression of a long non-coding RNA, GAEA (Glucose Aroused for EMT Activation), which associates with an RNA-binding E3 ligase, MEX3C, and enhances its enzymatic activity, leading to the K27-linked polyubiquitination of PTEN. The MEX3C-catalyzed PTEN^K27-polyUb activates its protein serine/threonine phosphatase activity and inhibits its phosphatidylinositol/protein tyrosine phosphatase activity. With this altered enzymatic activity, PTEN^K27-polyUb dephosphorylates the phosphoserine/threonine residues of TWIST1, SNAI1, and YAP1, leading to accumulation of these master regulators of EMT. Animals with genetic inhibition of PTEN^K27-polyUb, by a single nucleotide mutation generated using CRISPR/Cas9 (Pten^K80R/K80R), exhibit inhibition of EMT markers during mammary gland morphogenesis in pregnancy/lactation and during cutaneous wound healing processes. Our findings illustrate an unexpected paradigm in which the lncRNA-dependent switch in PTEN protein serine/threonine phosphatase activity is important for physiological homeostasis and disease development.