A serine/threonine kinase, named protein kinase B (PKB)¹ for its sequence homology to both protein kinase A and C, has previously been isolated. PKB, which is identical to the kinase Rac², was later found to be the cellular homologue of the transforming v-Akt³. Here we show that PKB is activated by stimuli such as insulin, platelet-derived growth factor (PDGF), epidermal growth factor (EGF) and basic fibroblast growth factor (bFGF). Activation of PKB was inhibited by the phosphatidylinositol-3-OH kinase (PI(3)K) inhibitor wortmannin and by coexpression of a dominant-negative mutant of PI(3)K. PDGF receptor mutants that lack detectable associated PI(3)K activity also fail to induce PKB activation. PKB kinase activity is correlated with phosphorylation of PKB on serine. Finally, we show that a constructed Gag–PKB fusion protein, homologous to the v-akt oncogene, displays significantly increased ligand-independent kinase activity. Furthermore, this activity is sufficient to activate the p70 S6-kinase (p70^S6k). These results suggest a role for PKB in PI(3)K-mediated signal transduction.