Insulin activated endogenous protein kinase B alpha (also known as RAC/Akt kinase) activity 12‐fold in L6 myotubes, while after transfection into 293 cells PKBalpha was activated 20‐ and 50‐fold in response to insulin and IGF‐1 respectively. In both cells, the activation of PKBalpha was accompanied by its phosphorylation at Thr308 and Ser473 and, like activation, phosphorylation of both of these residues was prevented by the phosphatidylinositol 3‐kinase inhibitor wortmannin. Thr308 and/or Ser473 were mutated to Ala or Asp and activities of mutant PKBalpha molecules were analysed after transfection into 293 cells. The activity of wild‐type and mutant PKBalpha was also measured in vitro after stoichiometric phosphorylation of Ser473 by MAPKAP kinase‐2. These experiments demonstrated that activation of PKBalpha by insulin or insulin‐like growth factor‐1 (IGF‐1) results from phosphorylation of both Thr308 and Ser473, that phosphorylation of both residues is critical to generate a high level of PKBalpha activity and that the phosphorylation of Thr308 in vivo is not dependent on phosphorylation of Ser473 or vice versa. We propose a model whereby PKBalpha becomes phosphorylated and activated in insulin/IGF‐1‐stimulated cells by an upstream kinase(s).