When cells attach to the extracellular matrix (ECM) a proliferation permissive signal is engaged. The mechanism involves activation of the integrin/PI3K/Akt signal pathway. FoxO3a is a transcriptional activator and inhibits cell proliferation via upregulating the expression of the cell cycle inhibitor p27. Furthermore, it is known that activated Akt can suppress FoxO3a function. However, it is not known whether integrin interaction with the ECM regulates FoxO3a function. We examined whether the β1-integrin-mediated signaling pathway promotes fibroblast proliferation via FoxO3a suppression. We found that when fibroblasts are attached to collagen, PTEN protein expression and activity are inhibited due to promotion of PTEN degradation. This decrease in PTEN function permits FoxO3a suppression via the PI3K/Akt pathway. In contrast, the inhibition of PI3K/Akt or reconstitution of PTEN restores FoxO3a expression on collagen. Furthermore, we found that the serine/threonine phosphatase PP2A also regulates FoxO3a. PP2A expression/activity is low when fibroblasts are attached to collagen, and PP2A overexpression augments FoxO3a levels. Thus the mechanism involves a coordinated decrease in PTEN and PP2A phosphatase activity and increase in PI3K/Akt activity. We show that β1-integrin-ECM interaction decreases FoxO3a protein levels via caspase-3-mediated cleavage. Our novel finding indicates that during fibroblast interaction with ECM, activation of β1-integrin/PI3K/Akt by inhibiting PTEN in combination with low PP2A phosphatase activity synergistically inhibits FoxO3a, promoting fibroblast proliferation.