Germline mutations of the LKB1 gene are responsible for the cancer-prone Peutz-Jeghers syndrome (PJS). LKB1 encodes a serine-threonine kinase that acts as a regulator of cell cycle, metabolism and cell polarity. The majority of PJS missense mutations abolish LKB1 enzymatic activity and thereby impair all functions assigned to LKB1. Here, we have investigated the functional consequences of recurrent missense mutations identified in PJS and in sporadic tumors which map in the LKB1 C-terminal non-catalytic region. We report that these C-terminal mutations neither disrupt LKB1 kinase activity nor interfere with LKB1-induced growth arrest. However, these naturally occuring mutations lessened LKB1-mediated activation of the AMP-activated protein kinase (AMPK) and impaired downstream signaling. Furthermore, C-terminal mutations compromise LKB1 ability to establish and maintain polarity of both intestinal epithelial cells and migrating astrocytes. Consistent with these findings, mutational analysis reveals that the LKB1 tail exerts an essential function in the control of cell polarity. Overall, our results ascribe a crucial regulatory role to the LKB1 C-terminal region. Our findings further indicate that LKB1 tumor suppressor activity is likely to depend on the regulation of AMPK signaling and cell polarization.