The cell-cycle effects of mTORC1 are not fully understood. We provide evidence that mTOR-raptor phosphorylates SGK1 to modulate p27 function. Cellular mTOR activation, by refeeding of amino acid-deprived cells or by TSC2 shRNA, activated SGK1 and p27 phosphorylation at T157, and both were inhibited by short-term rapamycin treatment and by SGK1 shRNA. mTOR overexpression activated both Akt and SGK1, causing TGF-β resistance through impaired nuclear import and cytoplasmic accumulation of p27. Rapamycin or raptor shRNA impaired mTOR-driven p70 and SGK1 activation, but not that of Akt, and decreased cytoplasmic p27. mTOR/raptor/SGK1 complexes were detected in cells. mTOR phosphorylated SGK1, but not SGK1-S422A, in vitro. SGK1 phosphorylated p27 in vitro. These data implicate SGK1 as an mTORC1 (mTOR-raptor) substrate. mTOR may promote G1 progression in part through SGK1 activation and deregulate the cell cycle in cancers through both Akt- and SGK-mediated p27 T157 phosphorylation and cytoplasmic p27 mislocalization.